Rising life expectancy could see interest in equity release spike
08 August 2011
Increased life expectancy means 20-year-olds are now three times more likely to reach 100 than individuals of their grandparents' age.
This means that more financial planning has to go into retirement, which may see many people move towards equity release schemes as a way to fund their retirement years.
Research carried out by the Department for Work and Pensions found a person born in 2011 has an eight times better chance of reaching a century than someone who was born in 1931.
Girls now have a one-in-three chance of making it to 100, while boys have a one-in-four opportunity.
This, coupled with the lack of investment in pension schemes from those in their 20s, showcases how individuals need to start seriously considering how they will fund their post-life work.
One option open to homeowners aged between 55 and 95 is an equity release scheme.
People will be able to get a lump sum of cash to help them financially, while they also get to keep the security of their house.
Minister of state for pensions Steve Webb said: "These figures show just how great the differences in life expectancy between generations really are.
"The dramatic speed at which life expectancy is changing means that we need to radically rethink our perceptions about our later lives.
"We simply can't look to our grandparents' experience of retirement as a model for our own. We will live longer and we will have to save more."
As the average age that people live to continues to swell, then the need to address the situation will also intensify.
With 500,000 citizens expected to be 100 or older by 2066, this is not an issue that will go away.
Homeowners who want to know whether or not they can take advantage of this financial option should use the equity release calculator at Key to find out if they are eligible.
Posted by Christian O'Leary