Recent figures suggest that an annual income of £30,600 provides a ‘moderate lifestyle’ for retired couples, although the average is about £26,600, including the state pension. The equivalent for someone living alone would be about £21,000.
With inflation at a record high, leading to energy and other costs soaring, retirees are exploring ways to increase their income to sustain living standards.
An increasingly popular option for homeowners is equity release, with lifetime mortgages – including borrowing a one-off lump sum – accounting for a high proportion of deals. Demand is at its highest amongst those in their sixties and mid-seventies.
However, there are a broad range of schemes available, and it is essential to take independent advice on the most appropriate way forward to maximise benefits to individuals and couples.
There is pressure from government for older people to downsize, but this is unfair when they have devoted many years to what they regard as a ‘lifetime home’, however modest it may be, with happy memories. Releasing equity can be a way to sustain that property, making it more energy efficient, with insulation and replacement windows to reduce running costs.
Involving the wider family in decision-making enables them to understand the financial implications faced by older couples and individuals, agreeing how any new funds should be used, as well as ways to support them to save day-to-day costs for mutual benefit. For example, sharing transport for the weekly shop, or helping with routine garden maintenance, which would normally require employing someone to do the heavy work.
Our advisers at Premier Equity Release are empathetic, encouraging potential borrowers to explain their financial situation in detail, without embarrassment, so that the most appropriate solutions can be secured for the long term. Just give us a ring.