Financial advisers are failing to mention equity release as an option in 93% of conversations with home owners about retirement, research by Canada Life suggests.

The later life lender says that only 7% of home owners were informed about equity release unprompted during retirement planning discussions.

It found that 6% of respondents had proactively asked about equity release themselves, but 76% had not talked about this option at all in sessions with their financial adviser.

Polling also revealed a number of prevailing misconceptions about later life loans that many consumers hold.

It found that four out of five respondents were not aware of the “no negative equity guarantee,” which has long been a safeguard attached to all later life mortgages issued by lenders that are members of the Equity Release Council.

Many incorrectly believed that their family could end up owing the lender more than the value of their property after they die or move into a care home.

Despite this, only 48% of homeowners were confident that their savings and pension income would last them throughout retirement. 

The survey found 67% of homeowners did not know that it is possible to still pass your property onto your children after releasing equity and 63% did not know it was possible to move house.

Canada Life managing director of retirement Pete Maddern says: “As people live longer and many individuals find their pension savings falling short, unlocking money tied up in property to supplement pension income is likely to become an increasingly important aspect of retirement planning.

“Furthermore, with unspent pensions set to be included in inheritance tax calculations from 2027, more individuals will be seeking flexible estate planning strategies. 

“Equity release can play a key role in enabling wealth to be passed to the next generation and in mitigating potential inheritance tax liabilities.

“It’s encouraging to see the progress the FCA has made in recent months to explore how the later life lending sector and advice framework should evolve. 

“While equity release will not be right for everyone, these developments have the potential to improve consumer understanding and awareness of later life lending, and to enable advisers to have more holistic conservations with their clients about whether equity release could help them achieve their later life and retirement goals.”