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Should I downsize to help boost my later life finances?

Your Money
Monday 07 November 2022
If, like many others, your financial well-being has changed significantly over the past few months due to the ongoing cost-of-living crisis, you may be looking for a way to free up more funds to protect your later life finances.

Is downsizing a good option?

Downsizing is a core part of retirement planning for many and has been a common way to help raise funds in later life. But you need to fully understand whether it will stack up as an option to improve your finances.

Surprisingly, only around 1 in 5 people who choose to downsize end up with a cheaper property and fewer bedrooms. The reason for this becomes clearer when the average price of a four-bedroom family property in the UK, £379,995, is compared with the average price of a bungalow in 2021, £335,419, according to Rightmove.

Meanwhile, around a quarter are no better off than before, having ended up in a similarly-priced home. Also, according to Which?, anyone moving can also be subject to significant costs – with the average cost to move home in October 2021 almost £12,000, further reducing the financial benefit of moving.

Equity release could be an alternative

With equity release, you could unlock some of your home’s value in tax-free cash, in a similar way to downsizing, but you can do so without the hassle of moving home.

Additionally, with a lifetime mortgage, the most popular form of equity release, you get so much more, with a range of features that have made it an increasingly popular way for over-55s to help boost their later life finances.

A lifetime mortgage is a loan secured against your home. But, unlike other conventional mortgages, there are no mandatory monthly repayments to make, freeing up more disposable income for you to rebalance your later life finances. The loan, plus roll-up interest, is only repayable when you pass away or move into long-term care.

You’ll also always retain full ownership of your property, which means you could access some of your equity now and stay in the home you love for however long you choose.

It also means you don’t have to face the challenge or stress of finding a new home that’s suitable. And you don’t have to deal with the emotional and logistical impact of leaving behind family, friendships and communities you’ve formed bonds with.

So, if you’re looking for a way to help boost your later life finances but don’t want to leave your home, equity release could help.

The importance of expert advice

But the need for expert advice is crucial. At Key, we have more than 20 years’ experience providing over-55s with specialist advice. We've helped more than 1 million people decide if equity release is right for them.

Our advisers will help you balance your current needs with your long-term plans, ensuring you’ve considered all your other options before going ahead.

You might be able to use savings or even borrow from friends or family. No matter your needs, we’re here to ensure the decision you make is the most suitable one for your circumstances. And if equity release isn’t right for you, we’ll tell you.

We don’t charge anything for our initial advice. You only pay a fee if you choose to go ahead. That’s so you can explore equity release as an option with an expert equity release adviser without it costing you a penny.

If you’d like to find out more about equity release and see if it’s right for you, order your FREE guide by clicking here.

Or use our FREE online calculator here to see how much you could release today.

Equity release reduces your estate’s value and may affect your entitlement to means-tested benefits. Our equity release advice relates to Key-branded lifetime mortgages only - a loan secured against your home. With a lifetime mortgage, there are typically no monthly repayments to make, as the loan, plus roll-up interest, is repaid when the plan comes to an end. £1,299 fee only payable on completion.
Page last updated: Tuesday 16 April 2024