Equity release increase as “My home is my pension” rings true
There has been a significant increase in, not only the number of equity release plans taken out, but also the amount of money withdrawn via equity release schemes in the first half of the year, according to new figures.
The average amount released is now £52,269, up 34 per cent on amounts released in the past four years. The average withdrawn in 2008 was £38,992 while in 2009 and 2010 the average amounts were £45,731 and £48,984 respectively.
Nearly 11 per cent more borrowers released equity from their property in January to June this year compared to the same period last year. The North, who had previously been somewhat subdued to equity release, saw the largest regional increase; equity release plan sales rose by 46 per cent.
This considerable increase is, in large part, a consequence of the baby boomers reaching retirement faced with significantly lower annuity rates than expected. Roger Marsden, Head of Retirement at Aviva, comments on this equity rich, cash poor generation:
“For many years, some people have been saying “My home is my pension”. We have now reached the point when they need to start cashing in.”
Content correct at time of publication