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Best lifetime mortgage equity release rates this month

Suzanne Greener

Head of Data Collection
Published: 13/04/2022

Last updated: 13th April 2022

The Equity Release Council’s Spring 2022 Report continues to show evidence that lifetime mortgages make a significant yet stable contribution to later life lending. Key points of the report, published earlier in April, confirm that average equity release rates are creeping up, in line with other mortgage lending and the degree of flexibility offered to borrowers through the ability to make either regular interest payments or ad hoc partial repayments is also increasing.

The plans listed below are not endorsed by Moneyfacts.co.uk but have been chosen as they offer competitive rates for the scenario that we have selected. It should be noted that other plans are available that offer similar competitive rates but may offer incentives, such as cashback, that suit the borrower’s need better. Borrowers should speak to an equity release broker who will be able to select the best plans for individual requirements.

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Pensioners hit hardest by inflation and market uncertainty, says interactive investor

Keeping up with the cost of living coupled with market uncertainty has driven investors to withdraw more from their pension pots.

Due to an increased need for cash to cover living costs and market uncertainty, the average value of income withdrawals from pensions increased in January and February this year.

This is according to interactive investor, an online trading platform, which collected this data from its Self Invested Personal Pension (SIPP) product.

“Not only do older people face a disproportionate impact on their living standards because of the greater than average proportion they spend on essentials such as energy and food, they are also more exposed to the slings and arrows of global stock market fortunes,” said Becky O’Connor, Head of Pensions and Savings at interactive investor.

Its research indicated that the average value of withdrawals from a SIPP drawdown in January was 8% higher than the average recorded over the past four years.

January recorded an average withdrawal amount of £1,944, which was up 25% when compared to the average withdrawal amount in the same month across the past four years.

“What we are likely to see over the coming months is retired people paying more attention than ever to that fine balance between withdrawing what they need to cover living costs and keeping enough in the pot to sustain them for their whole retirement,” said O’Connor.

Pension pots are also falling in value. The average value of a SIPP on interactive investor fell by 8.9% between the end of 2021 and the end of February.

Further research from the company determined that if pension withdrawals continue at a monthly average of £1,927, then fall in value by 10% over one year before growing by 3% in the second year, the average pension pot could lose value by the time the investor reached the age of 65.

With these factors taken into consideration, a £300,000 pension at the age of 65 would fall to a value of £270,000 and would run out at around age 73 instead of age 75.   

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End of tax year tips for pension funds

With the end of year tax season approaching on 5 April, what are the key tips for your pension fund?

With under a month to go until the end of the tax year, it is vital to understand how your pension is taxed. Below are five factors you need to consider before the end of the tax year, especially if you are considering withdrawing from your pension.

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Auto-enrolment trigger to remain frozen for 2022-2023

The freeze also includes the qualifying earnings band, with the lower limit remaining at £6,240 and the upper limit at £50,270.

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Equity release market is on the rise

The equity release market saw a return to growth in 2021. Record amounts of property wealth were accessed by customers, according to industry body the Equity Release Council, which says the market rose by 24.8% last year, to a total of £4.8 billion.

Annual lending to customers aged over 55 broke the previous record of £3.94 billion, which was set in 2018, as the fourth quarter of 2021 turned out to be the “busiest on record”. Between October and December, customers borrowed £1.3 billion. Average loan sizes increased as more than 76,000 new and returning customers took out products. These included lifetime mortgages and home reversion plans.

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Recent News

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Good news for retirees as annuity income reverses three-year decline

18th January 2022

Pensioners may be pleased to see average annuity income increased for 2021, marking a reversal after three years of falls.

Pensioners may be pleased to see average annuity income increased for 2021, marking a reversal after three years of falls.

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Increase in older homeowners using property equity to fund home improvements

6th December 2021

The number of homeowners aged over 50 unlocking equity from their property to pay for home renovations almost doubled in the three months leading up to September compared to the previous three months

The number of homeowners aged over 50 unlocking equity from their property to pay for home renovations almost doubled in the three months leading up to September compared to the previous three months

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Retirees face income shortfall risk

29th November 2021

Retirees looking for the security an annuity provides may be facing lower retirement income than expected as the average annuity rate fell by 2.90% between July and September (Q3)

Retirees looking for the security an annuity provides may be facing lower retirement income than expected as the average annuity rate fell by 2.90% between July and September (Q3)

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Equity release rates rise as £4 billion in property wealth set to be released this year

11th November 2021

In the first nine months of 2021 homeowners have taken out £2.989 billion via equity release, but new data shows that equity release rates are rising

In the first nine months of 2021 homeowners have taken out £2.989 billion via equity release, but new data shows that equity release rates are rising

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Most Popular Retirement News

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Best lifetime mortgage equity release rates this month

13th April 2022

Statistics recently released by the Equity Release Council announcing fourth quarter and full year figures highlight the popularity of Equity Release products. During 2021, 76,154 customers took out new plans, made use of existing drawdown reserves or agreed extensions to existing plans.

Statistics recently released by the Equity Release Council announcing fourth quarter and full year figures highlight the popularity of Equity Release products.

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Should you increase mortgage repayments or your pension contribution?

16th June 2021

Whether it is getting a pay rise or paying off ,a long-term debt, getting a little bit extra each month can be a great boost to personal finances

Whether it is getting a pay rise or paying off ,a long-term debt, getting a little bit extra each month can be a great boost to personal finances

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How much do you need in your retirement pot to retire well?

2nd June 2021

A survey of 7,000 retirees by consumer organisation Which? estimates those looking for a comfortable retirement need a pension pot of between £192,000 and £305,000 depending on whether they use pension drawdown or an annuity. In terms of income this equates to £19,000 per year to live comfortably when retired.

A survey of 7,000 retirees estimates those looking for a comfortable retirement need a pension pot of between £192,000 and £305,000

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End of tax year tips for pension funds

10th March 2022

With the end of year tax season approaching on 5 April, what are the key tips for your pension fund? With under a month to go until the end of the tax year, it is vital to understand how your pension is taxed. Below are five factors you need to consider before the end of the tax year, especially if you are considering withdrawing from your pension.

With the end of year tax season approaching on 5 April, what are the key tips for your pension fund?

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