Every now and then you read an online or newspaper article and think, ‘this applies to me’. It can be a weird sensation, as though the article’s author had delved deep into your innermost thoughts, or watched as you’ve done something and translated your actions into words.
I’ve experienced this sensation a few times, perhaps most oddly when last buying a car. I’d taken the vehicle for a test drive and really liked it; I’m not a car person, so whatever I buy must be functional, reliable and comfortable, capable of getting from A to B without any fuss.
I’m not bothered if my motor has twin camshaft overdrives or has go-faster stripes, but in the days immediately following my test drive as I was mulling over whether to buy the car, I happened to read a lengthy magazine review regarding what was deemed to be the vehicle’s impressive on-road performance. “If you’re looking for a modern, comfortable, reliable car which is an absolute joy to drive,” it concluded, “you should invest in this as it’s easily the best in class.” Coincidence? Perhaps. Either way, the review, written by a respected journalist, clinched the deal and I bought the car the following day.
Not surprisingly, widely read reviews or extensive surveys tend to mirror our collective concerns or future intentions; the greater the article readership or survey sample size, the higher the chances of you reading its findings and concluding they hit the nail on the head.
For example, following an extensive survey conducted towards the end of last year, a well-known insurance company reported that more than half (52%) of survey participants aged over 50 were concerned about the potential lack of a guaranteed retirement income.
Anecdotal evidence adds further support to the insurer’s conclusions, as I can confirm firsthand.
During the course of our daily constitutional, something my wife and I have done for years, we’ve become friendly with a large number of people of our age with whom we can have deep conversations on a variety of topics. A walk that once took an hour can now take almost two, but we’re not complaining.
One of the recurring topics discussed at length against a beautiful setting of magnificent trees, a well-tended herd of grazing cattle and melodic birdsong is retirement. Two blokes who happen to be exactly the same age as me both admit to worrying about whether the combination of the money they’ve saved, their pensions and other investments will be sufficient to last them for the rest of their lives. Their concerns have grown markedly over the past 12 months as millions of pensioners, current and future, recognise that they’re frequently seen by politicians as ‘an easy touch’.
Irrespective of how much capital you have, or how successfully you may have invested over the years, your pension pot or investment portfolio will produce a finite level of income. It follows that when contemplating how much money you wish to withdraw from your savings as income, you must also consider how long it will last.
Some folks can be quite nonchalant about their retirement planning, claiming that they just want to ensure that the last-ever cheque they issue will bounce. Bad luck on the payee, perhaps, but you see their point.
The problem with such an approach is obvious: how do you know when your turn to shuffle off this mortal coil is up? Well, we don’t, and because none of us do, we need to decide which of the following strategies is best suited to our (hopefully longer-term) objectives:
- Are you prepared to take the maximum income from your portfolio at the risk of eroding all of your capital?
- Would you prefer to take a lower income but preserve a much larger proportion of capital?
- A third option is to keep your capital untouched for now and use income generated from other sources (part-time job, other investments etc.) until the time comes to dip into your pension pot?
The dilemma inherent in all three objectives is immediately apparent: there is no correct answer to any of the trio. However, before the rate at which the years whizz by begins to speed up, there’s great merit in deciding which is best suited to your circumstances. The three options outlined above could, over time, be supplemented with tens of others.
Clearly, however, the survey referred to above appears to confirm that a good-sized number of people have recently taken decisive action to address their longer-term income-related concerns. During the first quarter of 2025, more than 20,000 people released equity from their homes; most using a lifetime mortgage, the country’s favoured method by which to release equity.
A lifetime mortgage enables homeowners aged 55 and over to release a proportion of their home’s equity as a tax-free cash lump sum. There are no legal requirements to make regular mortgage payments, and the homeowner(s) retain 100% ownership of their home.
As the equity release market has developed, so the range of lifetime mortgage plans has widened; today, the options available can be either to draw the tax-free lump sum as a one-off lump sum, alternatively to take a smaller initial amount, with subsequent drawdowns available as and when required in the future.
Both options are designed to meet the needs of the over 55 homeowners, with the lump sum option, either small or large, providing immediate capital expenditure for items such as home improvements, holidays, gifting, new car etc,
The flexible drawdown plan acts as a cash reserve facility should additional funds be required in the future, without having to go through the whole equity release application process again. It can provide a cash amount – as little as £500 to boost retirement funds. With the number of drawdowns allowed being monthly by most equity release providers, this can effectively boost your disposable income and, as a consequence, improving your retirement lifestyle.
As mentioned, equity release plans are available only to those aged 55 and over and before proceeding, it’s important to receive accurate, objective advice from a suitably qualified adviser. Releasing money from the home is not necessarily for everyone, as it could affect the value of your estate and impact upon your entitlement to means-tested state benefits.
Nevertheless, if you’re thinking your retirement income could do with a boost, it might be worth having a word with an adviser who can recommend the right plan for you which, in turn, could enable you to invest in an enjoyable retirement lifestyle as so many others have already done.
