Retirement ambitions and financial planning are fuelling a rise in equity release according to the findings of a new survey. Of the 418 people polled by Standard Life Home Finance, 32% want to boost their retirement plans whilst 28% were focused on financial planning. The results of the survey also revealed that 11% of respondents said they wanted to support family and friends as a motive for choosing equity release, whilst 17% said it was due to insufficient pensions and savings.
What else did the poll reveal?
As little as 8% of people questioned said their equity release choices were driven by an event that disrupted their retirement plans such as redundancy or divorce, whilst 17% who didn’t opt for equity release said their need for additional funding was because of a significant life event. According to head of sales at Standard Life Home Finance, Kay Westgarth: “While historically some people have been comfortable pigeon-holing equity release as a product of last resort, speaking to customers who have taken out equity release or seriously considered this option, you can clearly see that this is not always the case. Instead, it is frequently being used as a financial planning tool, a springboard to achieving retirement ambitions or an opportunity to support the wider family.”
Having detected a shortfall in their finances, 40% of over-55s who took out equity release were initially unsure, whilst 19% didn’t know how to secure the required funds. Instead of solely looking at equity release, 25% of those polled had contemplated downsizing and 20% had thought about using their savings. Moreover, 17% considered working longer and 19% looking into securing a loan. Talking about these findings, Key Later Life Finance chief executive Will Hale said: “Despite initiatives such as automatic enrolment, increasing numbers of people are finding that what they have saved into pensions and other investments is simply not enough to allow them to achieve their wants and needs in later life.” He added: “Therefore, it is not a surprise that the Standard Life Home Finance research released today highlights that the desire for a better quality of life in retirement and the need to manage a funding shortfall is driving customers to explore equity release as an option.” The research also showed that many people had started to consider other options before consulting a specialist financial adviser. Hale went on to say: “Rather than being a knee-jerk reaction, taking out equity release is a choice which is made after significant consideration and with the support of a qualified, specialist adviser.”