Managing your money in retirement is becoming more difficult. If you find yourself feeling the squeeze, you’re not alone
- More than a third of over-55s say their expenditure exceeds their income1
- Over half of over-55s hold credit card debt1
- Households aged 65-74 have, on average, just £3,100 of disposable income a year1
- Your home could be the answer
After you leave the world of work, you’re expected to enjoy life more. And while you’re afforded the time to do more of the things you love, your financial situation may make achieving them difficult.
More than a third of over-55s say their outgoings are greater than what they have coming in1
. It’s a worrying statistic, and one which highlights the importance of retirement planning.
The last thing you want when you call it a day on your working life is to face the same, or even increased concerns over financial security. Even if you’ve done all you can to give yourself the best chance, life can sometimes have other ideas.
But there’s no need to panic. Options are always available. If you’re a homeowner aged 55 or over, equity release
might be an option for you.
Could your home help?
Across the UK, thousands use equity release to unlock tax-free cash from their home every month2
. It’s not difficult to see why.
The money you release from your property is yours to spend as you wish. That includes things like everyday bills to cover any shortfall. In fact, more than one in 10 of our customers use some or all of their cash for that reason3
But it can provide you with peace of mind in other areas too.
More than half of over-55s in the UK hold credit card debt in the first half of 20191
. Considering that last year this number was closer to a third, the past 12 months have seen a big increase in those who are in or approaching retirement turning to unsecured credit.
This may go some way in explaining the growing number of over-55s using equity release to pay off existing debts. Today, more than a third use their tax-free cash to settle loans, credit cards and other similar financial commitments2
Live your life
However, it isn’t only your day-to-day spending that can be affected when you reach State Pension age.
You now have the freedom to do many of the things you couldn’t do while working. It might be seeing the world on a trip of a lifetime, making your property become the home you always wanted it to be or buying your dream car.
But with households aged 65-74 having on average just £3,100 of disposable income a year1
, it’s simply not feasible. That’s why almost one in three of our customers use some of their home’s value to take a trip of a lifetime. And more than half of them make home and garden improvements3
Why equity release?
Besides being able to spend your money however you wish, the fact the cash you unlock from your home through equity release is tax-free, its flexibility and security all play a big part in why so many decide to take it each year.
With all types of equity release, typically there are no monthly repayments to make.
With a lifetime mortgage
, the most popular form of equity release
, the loan, plus roll-up interest, is paid back when your plan comes to an end, which is usually when you or the last remaining applicant either passes away or enters long-term care.
That means with a lifetime mortgage, you still own your home.
It’s also important to know you can still leave an inheritance with equity release. With some plans, you can ring-fence a percentage of your home’s future value to be kept as a guaranteed inheritance, as long as you don’t take the maximum amount available, meaning you’ll know those around are being cared for after you’ve gone.
Also, with all Equity Release Council
approved plans, you’ll never owe more than your property’s worth. So, no debt from your equity release plan can be passed on.
Your next steps
You may think that taking out equity release is a long and arduous process. But it doesn’t have to be.
With our free calculator, in as little as 60 seconds you can see how much you could release from your property, as well as the rates and the lenders available to you.
But before you go ahead, you have to seek expert advice. It’s a regulatory requirement. A lender won’t accept your application without it.
And that’s where we come in.
We’re an independent equity release broker. That means one of our expert equity release advisers will search the whole market to find the most suitable equity release plan for you.
We’ve helped more than 1 million people decide if equity release is right for them4
. We have no ties to any lenders and we’re always 100% on your side.
We’ll handle all the paperwork during your application and the process between submission and receiving your tax-free cash is usually around 8-12 weeks.
That means that in as little as two months, you could be starting to enjoy the retirement you deserve.
So, what are you waiting for? Join more than 1 million others and see if equity release is right for you with Key
- Use our free calculator
- Use our free equity release calculator and see how much tax-free cash you could unlock from your home
Things to consider
Equity release will reduce the value of your estate and may affect any means-tested benefits you’re eligible for.
A lifetime mortgage is a loan secured against your home and is typically repaid when you, or the last remaining applicant, either passes away or enters long-term care.
You should always think carefully before securing a loan against your property.
Key’s initial consultation is free with no obligation to proceed. If you decide to go ahead with an equity release plan, our advice fee – usually 1.99% of the amount released, subject to a minimum of £1,499 – is payable only on completion.
- Read more about equity release
- Download our free equity release guide for more about what it could do for you, your journey and how equity release has changed the lives of others
more2life’s later life lending report
Equity Release Council
Key’s Market Monitor