Observed demographic changes involving both increased longevity and birth rate reduction account for the rising number of the elderly in the developed as well as developing countries. This phenomenon necessitates the introduction of several socio-economic changes. One of the most crucial ones is financial security provision for older adults. Finishing professional activity and starting the consumption of the accumulated capital within the base part of pension system very often negatively affects household wealth of the elderly. Lack of savings accumulated on voluntary part of pension system or its little value generate the necessity of searching either for new or additional sources of income. Equity release is a relatively new financial service addressed to old people which allows illiquid capital allocated in property to be converted into liquid financial resources. This may provide steady income supplementing retirement lifestyle, at the same time giving a guarantee of life residence in the property being the subject of the release contract. Equity release schemes can be entered provided a person has the right to the property, mainly the ownership of it. In advanced markets, there are two operating equity release models: the sale model and the loan model, out of which the latter one (reverse mortgage) dominates. Currently, on the Polish market the sale model, offered by mortgage funds, is available. Despite the introduction of necessary legal framework, the loan model is neither offered by banks nor other credit institutions. This monograph focuses most of all on equity release analysed from the perspective of household finance of elderly people. Its aim is to assess the role of equity release in supplementing household income of pensioners. The dissertation focuses on: types of financial decisions made by elderly people, assessment of household financial situation via selected measures, defining equity release functions that indicate development of these services, identification of risk profiles involved in the functioning of both the loan and sale model as well as calculation of benefits, recognition of threats and opportunities of equity release development on the Polish market taking into account law regulations, social, demographic, financial and economic factors as well as the situation on the housing market, proposing own variants of benefit pay-outs including changing age-related financial needs of elderly people, calculation of different options of equity release benefits, and assessing their impact on the household finance of elderly people. The monograph covers research conducted by the author as well as an analysis which resulted in formulating a lot of significant conclusions out of which the following can be distinguished: the level of accumulated savings by elderly people is not sufficient to secure proper standards of life in their old age, one person households of old people and women aged 65 and over constitute groups being most exposed to poverty and exclusion, implementing the loan model on the Polish market involves both benefits and risks for the financial institutions which have been allowed by the legislator to introduce the solutions to the market, financial security in old age is possible thanks to diverse income streams from equity release. Furthermore, presented in the monograph results explicitly indicate that benefits coming from both the sale and loan model allow those in the last stage of their old age to finance necessary aged care and specialist care services to secure satisfying comfort for the last period of their life. (original abstract)
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