How Property is Helping Ease Retirement for More People
12 December 2018 • Equity release insights
Attitudes to funding retirement
Investing in property has long been seen as the second safest way of saving for retirement, after paying into an employer pension scheme, according to research by the Office of National Statistics. But the proportion of people who consider this as a sensible option for providing for their older age is rising.
The Office of National Statistics’ Wealth and Assets Survey shows that since 2010, the proportion of people who think that investing in property is a safe way to provide for retirement has increased from 27% to 29%. Interestingly, the study shows it is more popular among people aged 16 – 44, but it’s the most popular option with the self-employed, with 42% of those questioned between July 2016 and December 2017 opting to invest in property to provide for their futures.
Indisputably, property is usually an individual’s largest asset, so it is increasingly becoming part of the jigsaw of funding our extended later lives.
Increased supply and demand of over 55 equity release schemes
With the UK set to have an additional 9 million people aged 60 and over within the next 50 years, it may be little surprise that retirement funding is not only a hot political potato, it’s also a growth market. This is as true in the equity release sector as elsewhere.
The number over 55 equity release plans agreed by members of the Equity Release Council increased by 28% in the first half of 2018 compared to the first six months of 2017, from 16,805 to 21,490 – four times the number taken out in the whole of 2014.
Alongside the growth in demand, has been considerable growth in supply; there are now 139 over-55 equity release products on the market, more than double the number just two years ago. These products are also offering customers greater flexibility than before, with 80% of them now allowing homeowners the choice to make penalty-free repayments of their loan, up from 68% a year ago.
With an ever-growing older population, we expect innovation in the over 55 equity release market to continue, as more and more people look to finance their dreams in retirement by releasing some of the value of their home.