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Rise in homeowners borrowing through equity release
Derin Clark

Derin Clark

Online Reporter
Published: 04/11/2020

There was a 41% increase in the number of people taking out equity release between July and September compared to the previous three months, a report released by the Equity Release Council has revealed.

According to the report, between July and September (Q3 2020), 10,351 new equity release plans were agreed, which is up from 7,341 agreed between April and June (Q2 2020), but 9% lower than the same period the previous year when 11,419 equity release plans were agreed.

In addition to the increase in new equity release agreements, Q3 2020 also saw an increase in customers taking extra drawdowns from their agreed plans compared to Q2 2020. The report found that during Q3 2020, 6,697 customers took equity release drawdown, which is a 19% increase compared to Q2 2020, when 5,608 customers took drawdown. However, again, Q3 2020 saw a year-on-year decrease, with 9,605 customers taking equity release drawdown during Q3 2019.

One reason for the increase in equity release activity during Q3 2020 compared to Q2 2020 is the impact the spring lockdown had on the market. During the lockdown, many potential customers were unable to get equity release due to property valuations being unable to take place. David Burrowes, chairman of the Equity Release Council, said: “These figures show a steady return to something closer to normal activity over the summer, after the market weathered the initial impact of Covid-19. With the country experiencing a break from lockdown, the pick-up was helped by a mix of new enquiries and delayed cases from earlier in the year.”

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Can you get equity release if you live in a flood area?

As climate change starts to have a greater impact on our environment, many homeowners are finding that homes are more at risk of flooding than they were 10 or 20 years ago. Being at risk of flooding can have an impact on property prices and increase insurance costs, but for older homeowners looking to release equity from their home, it can also impact getting an equity release deal.

According to the Met Office, the UK is getting wetter and the highest rainfall totals over a five-day period were 4% higher between 2008 and 2017, compared to 1961 to 1990. In addition to this, the amount of rain from extremely wet days increased by 17% when comparing the same periods. The increase in rainfall and, subsequently, increase in the possibility of flooding, means that not only are homeowners living close to rivers, streams and lakes likely to be at risk of flooding, but there is also the risk of flooding from saturated ground.

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The alternatives to a workplace pension when saving for retirement

The auto-enrolment workplace pension scheme is credited with encouraging the vast majority of workers to save towards their retirement. Data released by the Department for Work and Pensions in June found that 88% of eligible employees saved into a workplace pension in 2019, up from 87% the previous year.

Indeed, auto-enrolment, which was phased in from 2012, offers eligible employees an attractive way to save towards their retirement as employers have to contribute towards the pension savings along with the employee. But for employees who are not eligible for auto-enrolment or those who are self-employed, together with those who have either opted out of auto-enrolment or who want to have additional retirement savings, alternative ways to save towards retirement are available.

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Pension fund recovery slows – how will this impact your retirement?

Although pension funds are starting to recover, new data shows that between July and September the recovery fell significantly compared to the previous three months, putting into doubt how quickly pension funds will recover and when older workers will be able to retire.

Data due to be published in the Moneyfacts UK Personal Pension Trends Treasury Report found that between July and September (Q3 2020), average pension funds returned just 1.7%, which is significantly lower than the increase of 13.3% between April and June (Q2 2020). As a result of the lower growth, average pension funds are still 2.6% lower than at the start of the year.

Commenting on this data, Richard Eagling, head of pensions at Moneyfacts, said: “The performance of pension funds weakened noticeably during Q3 2020 meaning that pension returns remain in negative territory for 2020. Once again, these figures highlight the challenges that individuals face in being able to fund a comfortable retirement.”

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Six steps to organise your finances during financial planning week 2020

Today marks the start of the Chartered Institute for Securities and Investment’s (CISI’s) Financial Planning Week. The week, organised by the CISI and for the first time ever supported by its trade body rival The Personal Finance Society (PFS), aims to help improve consumers’ confidence and understanding of finances.
This includes helping more consumers to plan their finances and to make sure their life goals are supported with a financial plan to achieve these. A good financial plan can include a review of your pension arrangements, making sure your family is protected if your income reduces, a review of your savings and investments and the cost of your borrowing.


The CISI is offering all consumers a free one-hour personal financial planning session worth up to £500 during Financial Planning Week. The PFS is offering support through its pro-bono programmes, which includes 100 financial advisers offering free guidance to Armed Forces personnel. Consumers can also find financial advisers by using services such as unbiased.com and vouchedfor.co.uk.
The Coronavirus pandemic has affected nearly everybody’s day-to-day finances and the Money Wellness Index from first direct found more than half of adults (54%) now want to become more financially resilient. This is on top of 9 million UK consumers that identify as having low financial capability (study: Financial Conduct Authority) and just over a quarter of respondents to a CISI study stating they were not confident about their financial situation.

Rachel Springall, finance expert at Moneyfacts.co.uk, said:
“The impact of the Coronavirus pandemic on consumers and businesses may well have prompted them to take a step back to reassess their financial health and there is no time like the present to take advantage of free financial planning sessions through CISI during Financial Planning Week. If consumers would prefer to do the groundwork themselves or are wondering how to keep up a regular check on their financial health, then it is worth spending some time to seek out ways to do so.”
Consumers worried about their finances or lacking in confidence can take control by following a series of steps to manage their money and debts today and for the future.

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Recent News

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Is now a good time to remortgage your equity release?

17th September 2020

Over the past four years the average equity release has fallen by 1.14% so that it is now on average cheaper to take out an equity release than it was in 2016

Over the past four years the average equity release has fallen by 1.14% so that it is now on average cheaper to take out an equity release than it was in 2016

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Annuity rates have fallen by over £1,000 in the last decade

15th September 2020

Workers nearing retirement and looking for the income security provided by an annuity will be disappointed by our research which found that average annual annuity income has fallen by over £1,000 over the last decade

Workers nearing retirement and looking for the income security provided by an annuity

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Should you release equity from your home to pay for your grandchild’s house deposit?

10th September 2020

As house prices continue to rise, combined with the withdrawal of many first-time buyer deals from the mortgage market, it is currently a very challenging environment for those looking to take their first step onto the property ladder

As house prices continue to rise, combined with the withdrawal of many first-time buyer deals from the mortgage market, it is currently a very challenging environment for those looking to take their first step onto the property ladder

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Equity release rates are now lower than at the start of 2020

3rd September 2020

The average rate for equity release dropped to 4.21% on 3 September 2020, only fractionally above the lowest ever average rate seen since 2007, at 4.13% in March 2020. Those wanting to release cash tax-free from their home to help fund retirement or for home improvements can now do so at competitive rates.

The average rate for equity release dropped to 4.21% on 3 September 2020, only fractionally above the lowest ever average rate seen since 2007, at 4.13% in Marc

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Most Popular Retirement News

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Pensioners need a £33,000 a year income to enjoy a comfortable retirement

17th October 2019

In order for workers to enjoy a comfortable retirement that includes holidays abroad, a generous clothing allowance and a car they will need to have saved enough for a £33,000 per year income

In order for workers to enjoy a comfortable retirement they will need to have saved enough for a £33,000 per year income

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Retirees with equity release could save money with an equity release remortgage

16th June 2020

Those who have borrowed money using equity release may find that an equity release remortgage could now significantly reduce the cost of this debt and help to protect the value of their property as part of their estate.

Those who have borrowed money using equity release may find that an equity release remortgage could now significantly reduce the cost of this debt and help to p

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Equity release rates are now lower than at the start of 2020

3rd September 2020

The average rate for equity release dropped to 4.21% on 3 September 2020, only fractionally above the lowest ever average rate seen since 2007, at 4.13% in March 2020. Those wanting to release cash tax-free from their home to help fund retirement or for home improvements can now do so at competitive rates.

The average rate for equity release dropped to 4.21% on 3 September 2020, only fractionally above the lowest ever average rate seen since 2007, at 4.13% in Marc

Read More
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Six steps to organise your finances during financial planning week 2020

5th October 2020

Today marks the start of the Chartered Institute for Securities and Investment’s (CISI’s) Financial Planning Week. We highlight six steps to organising your finances.

Today marks the start of the Chartered Institute for Securities and Investment’s (CISI’s) Financial Planning Week. We highlight six steps to organising your fin

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