Equity release to save retirees from renting
Cash-strapped retirees are selling their homes and moving into rented accommodation, according to new research by Prudential.
The study revealed that, while some retirees were perfectly happy with renting, many have been forced to sell due to financial reasons.
Why are people selling?
- 40% pay off debts
- 19% cover the costs of divorce/separation
- 9% boost retirement income.
However renting is not necessarily the cheaper option for retirees; average rent standing at £423 a month (£5076 a year) compared with average mortgage repayment for retirees of £257 a month (£3084 a year).
With retirement income dwindling, rent would therefore account for a considerable proportion of a retiree's outgoings.
Richard Espley, Head of Equity Release at Goldsmith Williams, comments:
“While some retirees may prefer the freedom that comes with renting, for many the idea of going through the stress of selling property during retirement is not one they relish. In fact it is something that some find particularly traumatic. There is, however, a way to avoid such a situation.
“Equity release allows a homeowner to utilise some of the value of their property whilst retaining the right to live there. Released as either a lump sum or in smaller more regular amounts, equity release is becoming increasingly more popular for retirees whose pensions savings have fallen short.”
Content correct at time of publication