Best Loans News

Millions of individuals over the age of 50 in the UK are totally unprepared for retirement. Apart from the fact that many do not have any adequate form of pension plan or savings to help fund their retirement, a growing number of individuals are still trying to pay off outstanding debts on personal loans, home owner loans and credit cards.

A new survey, which has been conducted by LV=, has found that somewhere in the region of 1.2 million people in their 50’s are planning to use their home as their pension plan, by either selling it and downsizing, or more likely taking out an equity release loan.

Despite the fact that house values are decreasing at the moment and most over 50’s readily acknowledge the fact that they have had around £21,000 knocked off the value of their property, the vast majority still see property as the best possible investment and are encouraging their children to take out a loan and buy property rather than take out a pension or investment plan.

An equity release loan only allows a home owner to release a percentage of the value of their property and this is only around 20- 25 per cent for people up to the age of 65.

In many cases, this equity release loan will only manage to pay off their existing home owner loan and other loan and card debts, without actually providing an additional lump sum or income to see them through a potentially very long retirement.

Whilst equity release loans can be a useful tool in retirement planning, people should not depend on this solely for their retirement and should start to save from an early age in order to provide for themselves.

Anyone who may be considering taking out an equity release loan should seek independent financial advice on the matter before they do so.