The Equity Release Council's October report shows that the number of over-65s living alone is on course to outnumber those aged under-65 for the first time on record, with two in five new equity release plans being taken out on a single basis.
Here at Equity Release Supermarket we have also witnessed that the margins between single and couple plans is narrowing, with 40% of plans now taken out by single people and 60% by couples.
Mark Gregory, our CEO & Founder commented: “We have seen a trend in the amount of single people taking out equity release over the past year, primarily due to a mixture of societal and financial factors.
“In fact, a notable take away from our data is that 65% of further advances are taken out by single people and only 35% by couples. This highlights that when a loved one dies, this inevitably places considerable financial pressures on the remaining partner and utilising equity release, in some cases, can support and ease their monetary burden.”
A lifetime mortgage is a popular way of releasing equity in a home. There are also other features of lifetime mortgages that support surviving partners or will help single people, such as downsizing protection. This is much more common on many plans, whereby the surviving partner has 3 years in which they can sell their home and downsize, without penalty.
Moreover, the increasingly flexible range of early repayment charges of many lifetime mortgage plans makes it much more affordable for single people to repay their plan. In the current environment, where the interest rates on many plans are below 3% (and fixed for life), repaying an equity release plan in the future could be increasingly affordable.
Mark added: “In the market, we’re now seeing that the industry is transitioning to develop solutions more akin to the needs of single people.
“It’s also encouraging to see that people are becoming more confident to take advantage of the wealth locked in their property. We’ve seen many people lose out on opportunities to save for retirement due to responsibilities such as caring for an elderly relative or taking a career break for their children, hence as a result they end up with less money when it comes to retiring.
“But this doesn’t have to be the case. Equity release can provide access to equity in the home, releasing additional income to help ease these financial pressures and provide a brighter retirement outlook.”