In 2023, UK homeowners released over £4 billion through equity release schemes; however, by 2025, the market experienced a significant downturn, with total annual lending dropping to £2.6 billion. This decline reflects a cautious approach among consumers, influenced by rising interest rates and economic uncertainties.¹

For UK homeowners considering unlocking cash from their property, it's essential to grasp both the benefits and potential pitfalls of equity release—while it offers immediate financial relief, it can also lead to increased debt over time due to compound interest.

So, what does MoneySavingExpert really say about equity release? And how does their advice align with other expert opinions?

In this comprehensive review, we delve into MoneySavingExpert's insights, examine the pros and cons, and assess whether their guidance serves your best interests.

Let’s get started…

STATEMENT: BankingTimes is a separate third-party information provider and therefore not related to MoneySavingExpert, and the information replicated in this section represents the interpretations of BankingTimes only and not the opinions of MoneySavingExpert. This piece does not constitute advice, or an incitement to enter any services or products provided by MoneySavingExpert.

Overview of MoneySavingExpert & Equity Release

MoneySavingExpert is a consumer finance website founded by Martin Lewis, offering advice on saving money, reducing debt, and financial planning.

It provides unbiased guidance on mortgages, pensions, and equity release, helping individuals make informed decisions.

Equity release is a financial product that allows homeowners over 55 to unlock tax-free cash from their property while retaining ownership or selling a share.

Let’s take a look at the finer details:

How Does MoneySavingExpert Influence Finance?

MoneySavingExpert influences finance by providing evidence-based financial advice, consumer rights advocacy, and in-depth guides on mortgages, savings, and debt management. 

Its independent stance ensures transparency in reviewing financial products, including equity release.

Through campaigns, newsletters, and comparison tools, MoneySavingExpert educates consumers about financial risks and savings strategies, challenging unfair practices, pressuring policymakers, and promoting better financial literacy in order to help individuals make cost-effective and informed financial choices.

What’s Equity Release & How Does It Work?

Equity release allows homeowners aged 55 and over to access the cash tied up in their property without having to sell it; it typically works through plans such as lifetime mortgages or home reversion plans. 

What’s the Difference Between Lifetime Mortgages & Home Reversion?

The difference between a lifetime mortgage and a home reversion plan is that a lifetime mortgage allows you to borrow against your home's value while retaining ownership, while a home reversion plan involves selling a part or all of your property to a provider in exchange for a lump sum or regular payments.

Both loans are upheld until death or once you move into long-term care. 

Who’s Eligible & What Are the Legal Implications?

Any UK homeowner aged 55 or over for lifetime mortgages, and usually 65 or over for home reversion plans, is eligible; additionally, the homeowner must have a property in good condition that is valued at a minimum of £70,000, though some lenders may have higher thresholds depending on the scheme or location.  

The legal implications include entering into an equity release agreement, which can affect inheritance and tax planning, making it essential to consult with legal and financial advisors to understand the full implications.

More On: Who is Eligible for Equity Release Products and Services?

What’s MoneySavingExpert’s View on Equity Release?

MoneySavingExpert views equity release as a last resort, emphasising its long-term costs, impact on inheritance, and potential alternatives like downsizing. It warns against high interest rates, compounding debt, and early exit penalties.

The platform advises seeking independent advice before committing, stressing that while equity release can provide financial relief, it should only be used after exploring alternatives. It also highlights the importance of Equity Release Council safeguards.

Here’s more on what they have to say:

What Advice Does MoneySavingExpert Give?

The advice that MoneySavingExpert gives ultimately emphasises caution when considering equity release. 

The website advises exploring all alternatives and understanding the long-term financial implications before proceeding, highlighting that while equity release can provide access to cash, it may also reduce the value of your estate and impact inheritance.

What Are the Biggest Risks & Misconceptions?

The biggest risks and misconceptions include the fact that compound interest can lead to increased debt over time and potentially impact means-tested benefits, and that equity release is a straightforward way to access cash without significant drawbacks. 

However, MoneySavingExpert points out the cruciality of fully understanding these aspects and seeking independent financial advice.

Read About: Little-Known Facts About Releasing Equity

What Are the Pros & Cons of Equity Release?

The pros of equity release include tax-free cash, no mandatory monthly repayments, and the ability to stay in the home, while the cons include high interest rates, reduced inheritance, and potential impact on means-tested benefits. 

These are all the benefits and drawbacks:

Pros

The pros of equity release include tax-free cash, no monthly repayments, and the ability to remain on your property. 

Here are the pros:

• How Can You Access Tax-Free Cash?: Equity release provides a way to unlock tax-free cash from your home's value, which can be used for various purposes such as home improvements, debt repayment, or supplementing retirement income.
• Why Are There No Monthly Repayments?: With lifetime mortgages, there are typically no monthly repayments required, as the loan and accumulated interest are repaid upon death or moving into long-term care.
• Can You Stay in Your Home?: Both lifetime mortgages and home reversion plans allow you to continue living in your home, providing security and comfort without the need to relocate.

Cons

The cons of equity release include compounding interest, impacts on inheritance, and potential hidden fees. 

Here are the cons:

• How Does Compound Interest Increase Debt?: Compound interest on the loan can significantly increase the amount owed over time, reducing the equity available in your property.
• Will It Affect Inheritance & Family Wealth?: Releasing equity reduces the value of your estate, potentially impacting the inheritance you leave behind.
• What Are the Hidden Fees & Exit Costs?: Equity release products may come with arrangement fees, valuation fees, and early repayment charges, which can add to the overall cost.

What Are the Best Alternatives to Equity Release?

The best alternatives to equity release include downsizing, using savings, taking out a retirement interest-only (RIO) mortgage, or borrowing from family; other alternatives include remortgaging, secured loans, or using government schemes like pension credit or housing benefits. 

Each option has different eligibility criteria and financial implications, making professional advice essential.

Here are your alternative options:

Should You Downsize Instead?

Whether you should downsize instead of opting for equity release depends on your financial goals, lifestyle preferences, and long-term plans. 

Downsizing can be a cost-effective alternative, as selling your current home and moving to a smaller, more manageable property could also reduce maintenance costs and household bills; however, downsizing comes with its own challenges, such as the stress of moving, legal and estate agent fees, and potentially leaving a home you love. 

Before deciding, it's essential to compare both options carefully and seek independent financial advice to determine which solution best suits your needs.

Is a Retirement Interest-Only (RIO) Mortgage a Better Option?

Whether a Retirement Interest-Only (RIO) mortgage is a better option than equity release depends on your financial situation and future plans, as an RIO mortgage allows you to borrow against your home while making monthly interest payments, preventing interest from compounding over time. 

This can be a more cost-effective solution for those with a steady income who want to preserve more of their estate for inheritance, but failing to keep up with payments could put your home at risk of repossession. 

In contrast, equity release requires no monthly payments but can be more expensive due to compound interest, so compare both options carefully.

Can Government Support Help?

Yes, government support can help some retirees manage their finances without needing equity release, and depending on your circumstances, you may be eligible for benefits such as Pension Credit, Council Tax Reduction, or Support for Mortgage Interest (SMI).

Additionally, local councils and charities offer grants for home improvements and living costs, potentially reducing the need to unlock property wealth. 

Before considering equity release, it's worth exploring all available government support options to ensure you're not missing out on financial assistance that could provide a more cost-effective solution.

How Can Better Budgeting Reduce the Need for Equity Release?

Better budgeting can reduce the need for equity release by helping you manage your finances more effectively and maximise your existing income and assets—reviewing your expenses, cutting unnecessary costs, and prioritising essential spending can free up additional funds.

Additionally, reducing debts, switching to lower-cost providers for utilities and insurance, and exploring part-time work or passive income sources can further ease financial pressure. 

By improving financial planning, you may find that equity release is not necessary or can be delayed, preserving more of your estate for the future.

What Should You Consider Before Choosing Equity Release?

Before choosing equity release, you should assess long-term costs, inheritance impact, and alternatives like downsizing or RIO mortgages; additionally, compare providers, check interest rates, and understand early repayment charges.

Evaluating potential changes in future needs, care costs, and family considerations can prevent financial regrets and ensure the best retirement funding strategy, which is why having a professional financial adviser by your side during the process is necessary. 

Take the following into consideration:

How Do You Know If Equity Release Is Right for You?

Knowing if equity release is right for you requires careful consideration of your financial situation, future plans, and alternative options; equity release has its pros and cons, so it is all about assessing those factors and weighing your options. 

First see whether you can meet your financial needs through other methods, such as downsizing, government support, or better budgeting, before committing. 

Why’s Independent Advice Essential for Equity Release?

Independent advice is essential for equity release because it ensures you fully understand the long-term financial implications and explore all alternative options before committing. 

A qualified adviser can assess your specific circumstances, compare different plans, and help you choose the most suitable solution by highlighting potential risks while ensuring the deal is fair and in your best interests. 

As equity release is a significant financial commitment, seeking independent financial and legal advice helps protect you from unsuitable products and ensures you make an informed decision.

What Questions Should You Ask Equity Release Providers?

When speaking with equity release providers, ask key questions that address interest rates—whether they are fixed or variable—and how they will impact the total repayment amount; enquire about fees and charges, including arrangement, valuation, and early repayment costs; and ask if the plan includes a no-negative equity guarantee, ensuring you won’t owe more than your home’s value. 

Check if you can make voluntary repayments to reduce interest accumulation and whether moving home is allowed under the scheme. 

Finally, confirm if the provider is a member of the Equity Release Council, which ensures they follow industry standards and offer consumer protection.

What Is the Overall Review of the Money Saving Expert on Equity Release?

As copywriting specialists, we've thoroughly researched and analyzed the Money Saving Expert's review on equity release. The review is largely pragmatic, emphasizing the potential benefits of this financial strategy while warning about potential risks. It underlines the importance of comprehensive understanding and careful consideration since equity release involves unlocking the value of your home while you still live there.

The Money Saving Expert's review distinctly points out that equity release is not for everyone. It stresses the importance of seeking professional advice given the long-term implications of inheritance and potential reduction in means-tested benefits. Furthermore, the review applauds the flexibility of equity release, such as the lump sum or regular payment options. It's a balanced review, mixing caution with recognition of potential benefits.

In Conclusion

In 2025, MoneySavingExpert’s insights on equity release highlight both opportunities and risks, but the right choice ultimately depends on your financial goals.

While equity release can provide a cash boost in retirement, it also comes with long-term implications, including reduced inheritance and potential costs.

Exploring all your options—such as downsizing or retirement interest-only mortgages—is the key to choosing the best decision for yourself and your family.

Before making a decision, compare providers, seek independent advice, and ensure you understand the full impact.