Will the Equity Release boom assuage the retirement funding fears of baby boomers?
The major financial concern of baby boomers nearing their retirement is how to fund their current lifestyle through their retirement years, according to a survey by a major financial advice firm. 52% of survey respondents feared they’d have to downsize their lifestyles at some point in their retirement. So, it seems that baby boomers are afraid that they haven’t saved sufficiently during their working lives to have the retirement they planned.
New data released shows that Equity Release lending rose by 17% in the first six months of this year with the average customer releasing nearly £68,500 an increase of £3,500 on the average during the same period last year. Many of those who’ve chosen to release property equity have used the funds to improve their standards of living in retirement with 58% of customers using some or all of their money to improve their home or garden and 28% have used it to finance holidays.
This data shows that there’s a trend emerging for property wealth to be used to boost retirement income and as a consequence the Equity Release market is growing rapidly. The next generation to retire – the baby boomers – given their fears are likely to continue this trend and use Equity Release as a means to avoid any reductions in lifestyle during their retirement.
Richard Espley Head of Equity Release comments:
“The performance of Equity Release reached new heights in the first half of 2015 with a rise in the total numbers of Equity Release plans year on year from 10,013 to 11,007. As Equity Release lawyers we’ve also seen the impact of this with increasing numbers of instructions.
“The Equity Release industry is very positive about this growth and from the results of the research into ‘baby boomers’ and their concerns about funding their retirement I’d say this optimism is well placed!”
This content is correct at time of publication