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How Equity Release Could Secure You a More Comfortable Retirement

Industry figures from the first three months of 2016 detail how homeowners unlocked some £329.9 million from their properties with equity release. The average amount borrowed was  £76,000.

The news highlights the ever growing popularity of releasing equity and how it can provide a more comfortable retirement for plan holders. The Equity Release Council, who released the figures, has stated it places housing wealth: “centre stage in financial planner for later life.” It’s the biggest first quarter in its 25 year history.

With house prices rising, homeowners have turned to their properties to unlock wealth which has provided more security to homeowners, whilst drawdown mortgages have provided added flexibility so people releasing equity can take money as and when they need it.

Clearing Debts with Equity Release

One in three retirees are turning to equity release to pay off debts created by credit cards, loans, and outstanding mortgages. The average pensioner owes more than £34,000, with one in five (21%) of pensioners owing more than £50,000. Worryingly, over 7% need to pay off over £100,000.

These figures highlight an alarming trend in which hard working pensioners are retiring with vast debts. As a consequence, it’s no surprise some 5,175 equity release plans were taken out in the first few months of this year, showing a 6% increase on 2015.

Whilst pensioners may be cash poor, they are in fact rich through their properties. By releasing equity, many are instantaneously able to pay off outstanding debts and have money left for improvements to their retirement.

Some 43% of those in debt immediately paid off their mortgages thanks to releasing equity. With low interest rates, plan holders are providing with one of the best opportunities on the market to lead a more comfortable lifestyle.

Find Financial Security in Retirement

With the notion many pensioners are being let down as they retire with large debts, the security of releasing equity is providing thousands of people with a secure and lucrative solution.

Overs 55s can unlock well over £50,000 from their property to clear debts, and with policies such as a no-negative equity guarantee retirees can be sure they’ll never owe more than they have borrowed.

Releasing equity also ensures pensioners have more financial freedom and flexibility in retirement. Once debts have been cleared with a windfall cash lump sum, pensioners are free to spend the remaining funds on anything they like.

Overs 55s can leave an early inheritance and see their loved ones enjoy their money, fund house improvements, purchase luxury gifts, or head off on the holiday of a lifetime. With more and more pensioners turning to releasing equity, and interest rates at an all-time low, now could be the time for you to release equity and enjoy your retirement to the full.

Want to know how much you could unlock? Try our free equity release calculator.