If you're looking to boost your income in retirement, you may have considered downsizing. This could free up valuable equity and can also mean you've got a smaller property to maintain, but what if you don't want to leave the family home you've lived in for years? That's where equity release can come in, and figures show that its popularity is soaring.
Figures from the Equity Release Council show that this form of lending surged to an all-time high in the second quarter of the year, with a total of £384.3m being lent from April-June. This is the largest amount seen in any quarter since records began, easily surpassing the previous high of £375.4m set in the third quarter of 2014, and equates to an average of £4.2m of housing wealth being withdrawn every single day.
Furthermore, the value of housing wealth released during the three-month period marks an increase of 18% on both a quarterly and annual basis, while the number of new equity release customers (5,400) is up 11% from the first three months of the year. The uplift comes despite the fact that savers have greater access to their pension pots following the reforms, the report noted, highlighting the "growing appeal of using property wealth as an extra source of retirement income".
Nigel Waterson, chairman of the Equity Release Council, commented on the findings: "The last three months have been a landmark period for UK retirees and those approaching retirement, and equity release activity continues to grow. There is no doubt the pension freedoms have created more options for people to consider, but the appeal of tapping into housing wealth is on the rise as older consumers seek to make use of all the assets at their disposal.
"An entire generation of homeowners have been paying into property their whole lives, making it an asset that can transform their financial options beyond the age of 55. Anyone seeking advice on how to plan their retirement should consider their property as a valuable source of wealth."
Given that you could quite literally be sitting in your biggest asset, it could be time to make the most of it. Equity release won't be for everyone – it could mean you leave a smaller inheritance, for example – but for those who want to boost their retirement wealth without downsizing, it could be worth considering. Contact our no-obligation equity release service to find out more and see if you could benefit.
Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.
Moneyfacts.co.uk will, like most other websites, place cookies onto your computer’s
hard drive. This includes tracking cookies.