Those approaching, or in retirement are all too aware that their retirement pots need to stretch further than ever.
Recent data from the Office for National Statistics (ONS) shows that between mid-2022 and mid-2032, the number of people of state pension age is projected to grow by 1.7 million, representing a 13.8% increase.
While living for longer is something that should be celebrated, for many, this will also be accompanied by an anxiety as to whether your retirement pot will stretch as far as it needs to.
Supporting all circumstances
Your financial adviser should explore all options with you to help you achieve your long-term goals and anticipate a longer-lived retirement. In some cases, that may include opting to supplement pension savings with property wealth. This is becoming a more popular and viable option, especially given the significant growth in property values.
Legal & General’s (L&G’s) analysis of ONS data indicates house prices in England and Wales have increased by 20% over the last five years and it is vital to consider how this can be used to support your retirement.
Using a later life lending product, such as equity release, to access the money held in your property assets could add the equivalent of five additional years of retirement income when used in tandem with an existing drawdown pot.
This type of financial solution offers flexibility and the potential to significantly enhance your financial security later in life.
As an illustration, consider a couple in their seventies who own their home outright, valued at £400,000. By choosing to release equity, they could release a portion of their property's value either as a lump sum or as regular drawdown payments without the need to move. This tax-free cash could be used to supplement their retirement income, help with unforeseen expenses, or even provide financial support for their grandchildren’s education. Equity release enables them to remain in the comfort of their home while enhancing their financial security for the years ahead. The flexibility of this solution means they can tailor the funds to suit their evolving needs and priorities as they enjoy retirement.
Getting the right help
As more and more people discover how solutions like equity release can help fund their retirement, getting tailored advice for your unique situation is vital. It’s important to remember that equity release is a lifetime product, designed to adapt as your life and circumstances change over time.
Since L&G Home Finance started 10 years ago, they’ve helped over 100,000 customers release more than £6.5 billion in equity. Throughout this time, lifetime mortgages have become increasingly common, and their features have evolved to offer you significant flexibility.
This can include features such as flexible voluntary payment options, access todrawdown facilities, even monthly payments to service the interest, thus managing your future balance and ultimate inheritance. During the equity release advice process we’d always advocate to have family involved to ensure they are aware of your decisions, as they could be affected longer term by a release of equity made today.
Ensuring your interests are protected as you age is particularly important in later life planning. Where you need more support with financial and medical decisions as you get older, you have the option to establish a Power of Attorney who can support you in making those decisions as it relates to your lifetime mortgage.
The increasing popularity of these products reflects how they've evolved, becoming more flexible and adaptable. There are also more than just lifetime mortgages available for over 55’s in today’s later life lending market.
Retirement Interest Only Mortgages (RIOs) are suited to homeowners over the age of 50 with good post-retirement incomes and looking to make mandatory payments to service the interest charged by the lender. By doing some maintains a level balance for the lifetime of the loan.
Home reversion plans and even residential mortgages that run into retirement can be a consideration for those with situations suited. And this is where an experienced equity release adviser would help assess your situation, analyse your requirements and make a recommendation – even telling you if equity release isn’t right for you just yet.
Complementing later life mortgage advice
Navigating decisions in later life might feel a bit overwhelming, but you might be surprised by the extensive support available to you.
For instance, L&G Home Finance’s new Your Lifetime Mortgage Guide is a valuable resource they’re providing to all their existing customers. It's packed with easy-to-understand information and points you towards support for all your long-term and changing needs.
As later life lending becomes a more common choice, our commitment is to support you for the long term. For us, it’s not just about helping you release wealth from your property; it’s about providing complete support whenever you need it most, whether through helpful guides, dedicated support services, or other resources.
To understand how it could work for you, or if you have any questions about equity release, you can speak to your local Equity Release Supermarket adviser, or call Equity Release Supermarket on 0800 088 5951.
