Financial products that seem easy to understand and affordable are sometimes untested in the market and show their flaws only after being purchased by thousands of consumers.

A Family Money reader, Mr P, from south Dublin recently read an article in the British press concerning such a product - the equity release scheme. This product and home reversion schemes were the answer to many older home owners' prayers when they first became popular in Britain in the 1980s as they solved a major financial difficulty.

These schemes allow owners to sell all or part of the family home in exchange for income while retaining the right to live in the home. Mr P asks if such a scheme exists in the Republic. "I am a 60-year-old single man with a parttime job which ends next year. I own my own house, which when recently valued was put at £295,000. I have no relatives I wish to leave this asset to. As my previous job was made redundant some years back I will only be entitled to a contributory old age pension. As you will gather from this I am basically equity wealthy but very cash poor.

"I would very much like to unlock some of this equity as soon as possible (say 40 to 60 per cent) to supplement my income when my little job is finished and to do essential repairs and decoration, etc. to the property before it starts to decline. "I do not wish to leave my home as it has been in the family for years and I have many friends around me whom I value, and I like the area very much. I have looked at getting something smaller nearby but there is very little between the selling and buying prices because of their location and the crazy property prices at present."

Mr P is not alone. There are thousands of older people searching for an answer to this problem. Schemes like these are not currently on offer in the Republic from the major financial institutions for good reason. Although the concept is good, in the past many of these schemes were heavily reliant on either the stock market or the property market which have both proven volatile over the years. Since the 1980s, home equity plans that were annuity-based or involved unit-linked investment funds and trusts have mainly failed leaving many older people in Britain homeless, in debt, or both.

Naturally, this stigma has prevented Irish companies from getting involved in this market. Even though these products are now structured differently, issues of property ownership are still a problem. Previous experience has shown that the arrangement is often challenged by heirs unhappy about losing their inheritance. The mental competency and age of the homeowner is often called into question when the will is contested. This means any institution offering these schemes in the future may be forced to seek medical clearance on the homeowner and disclaimers from the next of kin. All these variables increase the institutions' cost and decrease the likelihood that they will be willing to take on such risks.

In the Republic, some individuals are making arrangements with relations or friends through a solicitor. Some smaller insurance businesses have also taken an interest in the issue. There is no legislation regarding the structure of the schemes however and home owners without financial expertise may not realise the numerous risks involved. The percentage taken by financial institutions plus stamp duty incurred at the property's transfer, may add up to an exorbitant amount leaving executors an inadequate sum to settle the legal and financial bills of the estate following the owner's death.

Past experience shows that there are so many variables in this type of product that no matter how good it sounds it may not be worth the risk.