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Pensioners `using home equity to pay off debt`

One in three pensioners who withdraw equity from their home do so to pay off debt, according to new research for Age UK, the charity for the elderly.

The research, carried out by the University of Birmingham, found that the most popular reason for equity release is still home maintenance, accounting for half of the total.

But the fact that such a high proportion are withdrawing equity to take care of debt is worrying, says an expert at the IVA Advisory Centre.

"These findings suggest that all too many pensioners are going into retirement with debt to their name. In a way it`s good that they have equity to rely on - at a stage in their life when a formal debt solution might be unrealistic - but it does mean they`re using up their resources and potentially limiting their future options.

"Figures like this are a reminder for anyone approaching retirement in debt to do what they can to get on top of their finances."

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