Millions of retirees with outstanding debts could benefit from Equity Release
Much of the media’s coverage around the up-coming pension changes has centred on the expected rise of the grand-lords, older people who withdraw their pension ‘pot’ to purchase a buy-to-let property to fund their retirement. However recent research has shown that as many as one million people approaching retirement have outstanding mortgages so they may not be in a position to buy another property. They may instead choose to pay off the balance on their existing property.
Indeed 4.3m current retirees have outstanding debts including 2.3m who owe money on credit cards and for some settlement of these debts may well be the destination for at least some of their pension ‘pot’ if they choose to make a withdrawal from it.
Those people who use the funds in their pension ‘pot’ to pay off their mortgage or other debts may find that their depleted fund is no longer sufficient to finance the retirement they envisaged. They may face a stark choice – to carry on working a bit longer or to give up on those retirement dreams. However, there is an alternative – taking an Equity Release.
Richard Espley, Head of Equity Release explains:
“The new pension freedoms can give people an opportunity to enter retirement debt free but for many that will also mean a smaller than expected pension ‘pot’ to fund their retirement. Equity Release can provide a solution to this.
“Some people will need the boost to their retirement fund immediately whilst others will look to Equity Release as a means to finance the later part of their retirement when the funds in their pension ‘pot’ are exhausted.
“That illustrates a fundamental benefit of Equity Release – it can provide a flexible solution to fit with individual circumstances.”
To find out more about the Equity Release process and how it could fit your individual circumstances click here
Content correct at time of publicaton