Equity Release: The Retirement Telescope

Published: 10/06/2011

You know the story. Monday morning, your alarm rings shrilly, you prise your tired eyes open and let the room come into focus. Yes, it’s the start to another working week.

But imagine a Monday morning where you don’t need an alarm clock (and we’re not just talking about bank holidays!). In fact, picture a life alarm-clock free, a place where you could wake up naturally or stay up late on a weekday! Yes, we’re talking about the world of retirement.

Retirement is getting further away, isn’t it?

At the end of 2010, the government published proposals to increase the State Pension age to 66 for men. The State Pension age for women was previously 60 but has since started to increase gradually to 65 to mirror men’s¹.

But this is the State Pension age. There is nothing stopping people from retiring earlier, well apart from the small issue of funding it!

Everyone is finding themselves a little strapped for cash and it would appear things aren’t going to get any better anytime soon. This week, Scottish Power announced they will increasing gas bills by 19% and electricity bills by 10%² and where one supplier leads, other tend to follow.

And if this wasn’t of concern enough, our food bills are also increased. Our trolleys now cost 4.9% more than they did 12 months ago and prices are only expected to rise further³.

With the cost-of-living escalating, it’s not surprising the number of people paying into a pension or, making adequate provisions for their retirement remains low. According to Scottish Widows, “49% people are not setting aside enough for when they stop work” while “20% of these are failing to save anything at all”4.

Equity Release – A Saving Grace

Equity Release helps you utilise the value of your property. An Equity Release scheme allows you to free up money from your property whilst retaining the right to remain your property. You can either receive the money in one lump sum or as a regular income.

There are certain provisos regarding those who wish to apply for Equity Release. You need to be aged 55 – 95 (if you are couple, you both need to be in this age bracket), live in the United Kingdom and own a home with a value of at least £50,000.

All Equity Release clients require independent legal advice and we are a market leading provider of just that through our specialist advisory service GWLifetime. We have been advising clients in Equity Release for over 10 years and are a found member of the Equity Release Solicitors’ Alliance (ERSA).

Giving up work need not be a long distance goal; look through the equity release telescope and you could be enjoying retirement sooner than you thought.

Sources
¹Directgov
²Scottish Power (June 2011)
³The Independent (June 2011)
4Financial Times (June 2011)

Content correct at time of publication