The largest number of post-war baby boomers are now starting to
reach retirement age and this year and next will see the greatest
number of new retirees in history. Official figures forecast the
over-65 population will double from 2010 by 2020. This increase in
pensioners subsequently brings with it larger sums of retirees
presented with the realities of retirement costsen mass. While some
will be prepared financially for the years ahead, recent research
from the Equity Release Solicitors Alliance (ERSA) indicates many
are likely to will have insubstantial savings to provide themselves
with the standard of living they would hope for, and will need to
seek alternative assets to fund their retirement.
The ERSA research discovered the number of adults who feel they
do not save enough into their pension each month has reached a
staggering 73.3%. With pension pots shrinking, savings being eroded
by low interest rates and inflation, many retirees are finding
themselves financially stretched.
As a consequence of this mass movement into retirement recent
reports have suggested around two million workers over 50 are
already planning to use their home to help pay for retirement, with
one in four having no other option*. Being faced with a choice
between releasing equity and relocating is increasingly common,
demonstrated by the recent branding of the Home is their Pension
(HIPS) 'hippie' generation.
As the largest asset people commonly have, it's understandable
property is seen as way to provide an additional stream of income
in retirement. Furthermore, one in ten of those over 50 plan to use
the money locked in their home for the children, to help buy a new
house, save for a wedding or help with school fees.* This rising
trend reflects the difficult economic climate in which adult
children are increasingly turning back to their parents for
ERSA research has found equity release is becoming an
increasingly popular option to access wealth accumulated in
property, with 34% of people likely to consider an equity release
scheme. Downsizing and relocating is an alternative, but is often
undesirable to older generations with a plethora of memories and
personal experiences attached to their homes. Equity release allows
retirees to maintain a familiar environment, and avoid the hassle
of moving, while still freeing assets.
Although less drastic than moving house, embarking on an equity
release scheme requires careful consideration. Understanding equity
release information and seeking equity release advice is essential.
ERSA believes educating consumers on different fiscal retirement
options is fundamental to achieving optimal outcomes for every
*Data from LV
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- We will communicate in plain English, not legal jargon.
- Clients will receive fair and balanced reports in writing.
- Clients will receive a personal consultation with a suitably
qualified member of legal staff.