How is equity release evolving?

As more and more people are now living longer and healthier lives, the question of how to fund retirement has become increasingly important.

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Greater life expectancy

According to the Office of National Statistics, the over-65 demographic is eclipsing those aged between 16 and 64. Men are now expected to live for about 15 years following retirement, whereas for women the figure is slightly higher at 20 years.

A few decades ago, the average life expectancy was only a little greater than the age of retirement, so those extra years – although most welcome – mean that providing adequate financial support to fund retirement years is of increasing concern.

The benefits of equity release

For most people, their home is their most valuable asset, but not everyone is prepared to downsize into a smaller property or to move to a more affordable area. When you’ve worked hard all your life to provide a roof over your head, why should you have to move away from friends, family and neighbours?

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Equity release provides an ideal compromise, allowing you to benefit from the money tied up in your home yet enabling you to continue to live in your own familiar surroundings. As equity release becomes an ever-more attractive solution to the question of funding retirement, the market is evolving accordingly.

Low rates, more choice and greater flexibility

Midway through 2018, equity release offers hit a record low, with the average cost of a lifetime mortgage dropping to a little over 5%. Although rates are now starting to rise again, they still stand at an average of just 5.10%. Lenders are prepared to sweeten the pill further by introducing reduced product fees and free valuations in an attempt to encourage people into the market.

Equity release is a big step, so care needs to be taken when choosing the most appropriate products for your exact needs. One company that specialises in equity release Malmesbury at ensures that its advisors have the necessary skills and knowledge to provide carefully tailored advice based on your unique circumstances.

With so much flexibility and choice now available, it’s very much a buyer’s market. For example, many lenders will now let clients keep long-term costs down by allowing them to make regular interest payments or to engage in drawdown plans.


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