For homeowners aged over 55, equity release can be a great way of accessing wealth tied up in property. Your home is usually your biggest asset so equity release can be a good way to free up money for projects ranging from gifting money to family, to taking that dream holiday you always wanted.
Although downsizing is obviously an option, it might not be your preferred choice, especially if it could mean having to move away from family and friends, hence there is a growing number of people turning to equity release so they can stay put but still have the funds they want.
Why do people need to borrow in later life?
The number of people retiring with debt is increasing. According to research from Prudential in March 2018, 1 in 8 of us who retired in 2018 were predicted to do so without a pension. The FCA (Financial Conduct Authority) also warns of the ‘ticking time bomb’ of interest-only mortgages which started to mature at the end of 2018. Equity release is a way of repaying or restructuring debts and boosting income in retirement.
Although pension pots can be a real concern, many older homeowners have wealth locked in their home – their equity – and by accessing it they can use the money to fund the retirement plans they have in mind.
Popular Reasons for Equity Release:
- Refurbishments and home improvements including the garden, something that many homeowners have long wished to do but didn’t have the funds.
- Repaying debts and outstanding mortgages.
- Gift money to loved ones. Borrowers make financial gifts to their family, perhaps to fund further education or buy a property of their own.
- Care costs. As the population gets older, more and more people need care but want to stay in their home. Equity release allows them to release cash to pay for this care.
For some, equity release is a lifestyle choice. They want to live the retirement of their dreams and the equity that has built up in the property over the years is one way to achieve this. That may include the holiday of a lifetime, a major purchase such as a second home by the sea or a new car. As attitudes to ageing are changing – why not plan to fund these years to their fullest?
Of course, equity release is regulated by the Financial Conduct Authority and anyone who would like to consider releasing money in this way must seek expert advice from a qualified adviser.
If you would like to arrange to speak to an Access Equity Release adviser, please visit our website and book a callback. We’re always happy to help.
Sources:
*FCA Press Release Published: 30/01/2018
*Prudential press release March 2018
*Equity Release Council Market Report Autumn 2018
