Homeowners Relying On Equity Release Loans For Retirement
In the past, the majority of people could look forward to a reasonable pension to provide them with an income once they reached retirement age. However, these days more and more people have made insufficient, or no retirement plans, in many cases leaving them unable to pay for their bills, let alone the luxuries they wanted.
As a result of this lack of planning, around 40 per cent of home owners over the age of 45, who still have an outstanding home owner loan or mortgage, are planning to use the value of their home to help fund their retirement, according to a new survey from More 2 Life.
Attitudes towards equity release loans have been changing significantly over recent years, with a growing number of people acknowledging such loans as a valid part of their retirement plans. This could be either due to the fact that for many individuals, their home is their largest asset, or simply out of desperation because they have failed to make alternative financial arrangements.
It is interesting to note, that out of those home owners over the age of 45 who have already paid off their home owner loan, only 25 per cent realistically consider taking out an equity release loan.
A large proportion of those who do use equity release loans do so in order to repay their existing home owner loan of other outstanding loan and card debts.
Jon King of More 2 Life said “There is a shift in attitudes to with those who have home owner loans realising that their property wealth should play a major role in retirement.”
“On the face of it, conditions for growth in the equity release loan market are perfect with a change in attitudes as well as factors such as rising longevity meaning people will need income to last longer if they want a comfortable retirement.”
