There are many equity release experts forecasting that the ‘home’ will become a pension solution as many retirees struggle to make ends meet once retired. Equity release has been around since about 1965, but until recently it was seen as a last resort product and not a retirement planning product.
Research by LV= has indicated that of those planning to use the equity in their home, nearly a quarter (22%) believe this is now their best option, because their pension savings won’t give them the income they hoped it would, with 13% saying it’s all they have to rely on after the state pension. But interestingly, two-thirds (64%) said they had always planned to use their property for their retirement; the majority by selling but with 12% already planning to release equity.
Here at Retirement Solutions we asked independent financial adviser and equity release expert Adam Benson to comment on why there seems to be a shift in emphasis on equity release from last resort to retirement planning product, Adam said, “I think it is because many retirees now have smaller pension pots due to stock market crashes, many also still have mortgages when they retire and also annuity rates are at a 20 year low with forecasts that they will continue to fall further. So many retirees have no where else to turn that there home which is probably their biggest asset.”
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