Can Equity Release help meet your retirement needs?

UK homeowners are currently sitting on a significant amount of property wealth.

Maximise your assets for financial freedom

The total amount of housing equity available to homeowners over the age of 55 now stands at an estimated £622bn, according to estimates published by Canada Life.

These figures, based on property values from the latest Halifax quarterly regional house price index and analysed by Canada Life, revealed that the amount of equity available has increased marginally from when the data was last analysed in Q2 2023, when it stood at £616bn.

Can Equity Release help meet your retirement needs?

This equity tied up in property can potentially be unlocked through Equity Release Schemes, providing homeowners aged 55 and above with access to funds for various purposes, including supplementing retirement income or long-term care costs.

The Financial Conduct Authority (FCA) data highlights the growing trend of utilising property wealth in retirement planning.

Equity Release allows homeowners to access a portion of the value of their property while retaining ownership and the right to reside in their home.

The two main types of equity release are lifetime mortgages and home reversion plans. With a lifetime mortgage, homeowners can borrow against the value of their property, with the loan and interest repaid when the property is eventually sold, typically upon the homeowner's death or moving permanently into long-term care. Home reversion plans involve selling a portion or all the property to a provider in exchange for a lump sum or regular payments.

Consider the long term impact of equity release

It's important to carefully consider the implications of equity release, including the impact on inheritance plans and potential eligibility for means-tested benefits. Seeking professional financial advice from a qualified and regulated equity release adviser is highly recommended to ensure a comprehensive understanding of the risks and benefits involved.  The Equity Release Council are an independent body who set standards for product safety and advisor conduct, promoting consumer protection and confidence in equity release products.  Their guidance highlights the need for transparency and responsible decision-making and are a trusted resource when exploring equity release options.

Make informed decisions

While property can be a valuable asset in retirement planning, it is essential to explore all available options and make informed decisions that align with individual circumstances and goals.  Equity release may provide a viable solution for some homeowners, but it is crucial to weigh the pros and cons thoroughly before proceeding.

If you would like to discuss Equity Release in more detail then please contact Nicki Sparks.

Although every effort has been made to ensure that the information provided in this article is accurate and correct, the information provided does not constitute any form of financial advice. We recommend that you take financial advice before making any financial decisions.