Recent research has revealed that more than 10 million over-65s own their homes outright, bringing property wealth owned by this age group to over £2.9trn.
Around 37% of this wealth is in London and the South East, with over 65s in these regions holding £520bn and £582bn in the value of their homes respectively.
Key Later Life Finance, which carried out the research, said average income for a pensioner currently sits at £20,120 a year, rising to £29,170 for couples, and that these figures could be “substantially enhanced” if older homeowners made use of unencumbered equity.
Unlocking home equity is one way to boost retirement funds or help support younger generations with property deposits. Equity release isn’t suitable for everyone; it is important to take specialist advice.
Will Hale, from Key, said: “Over-65s have considerable wealth tied up in their homes and are literally sitting on money that could give them a more comfortable or fulfilling retirement.
“Alternatively, this wealth could be used to provide a living inheritance and offer family members cash at a point in their lives when they need it most, for example when children or grandchildren are looking to get on the housing ladder.
“Lifetime mortgages enable money to be drawn down tax-free which can be a sensible way for over-65s to fund retirement needs or to make gifts in a tax efficient way. However, everyone’s circumstances are different and it is important that these products, which do have some downside risks, are accompanied by specialist advice.”
- Contact Cailean for advice on equity release as part of your financial planning at hello@cailean.co.uk or call 01577 212577.