The reasons that people are effecting Equity Release plans are changing. There are many different reasons for its use and they are very different to what were perceived as the traditional reasons. This is due in some respect to the way in which providers offer their products however the main reasons for the change are an alteration in the way in which consumers perceive their property and themselves generally. There has been a huge social shift in the UK and at the head of this change are the “baby boomer” generation. Where large proportions of those at retirement age previously were content with a relatively quiet retirement the new generation of retirees are in general far more adventurous. Long haul travel is no longer the preserve of a select few, it is accessible within reason to all. Travel in general is entered into far more readily and those at retirement in many cases have enjoyed holidays and short breaks on a far more regular basis than previous generations. However these holidays are expensive and we are all aware of the income gap in retirement. This is one area where Equity Release meets the demand created by those people who wish to have the “holiday of a lifetime” but who cannot afford it from pension income.
Another reason that Equity Release becomes a key is that generally those in retirement are spending more money than future generations however their actual income in retirement is lower than previous generations in terms of % of salary. This obviously causes a gap between desire for lifestyle and the means of funding it. That gap can be closed by the use of an Equity Release Plan. It is often said that 40 is the new 30, that we are in effect becoming younger in body and mind. This is also true of those at 70 and 80. The picture of a retired person sitting in a chair with pipe and slippers is wildly outdated and patronising to a large swathe of the retired population. Purely at overseas sporting events, scan the visiting England crowd at an Ashes Test or following the Lions in South Africa last year, a significant percentage of these travelling fans were of retirement age. It is not to say that all of these trips were funded by Equity Release or indeed that it is the best use of the product. What is absolutely valid is to state that there are those whose standard of living is greatly improved by travel and that one option to pay for it is to use Equity Release.
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