The HIPpies ‘home is pension’ generation has doubled in the last year, according to retirement specialist LV=, as more than half (52%) of working homeowners over 50 (3.5 million people) plan to use the equity in their home to fund their retirement – compared to a quarter (28%) in 2012.
LV=’s 2013 HIPpies report reveals that the value of the average working over 50s’ property comes in at £258,000 – more than £15,000 higher than the national average of £242,000. As three-quarters of home-owning (5 million) over-50s own their property outright and those with a mortgage already have £149,640 worth of equity built up in their home, for many unlocking the capital in their home would provide them with a significant income boost. The increase in people using their properties to fund their retirement is likely to have been driven by increasing house values over a long period, and low interest rates on savings.
The report shows that the economic situation has also impacted on the retirement plan of many over-50s in the workplace, with just one in four (26%) on track to retire as they planned when they initially thought about their retirement. One in seven (13%) will still retire at the time they originally planned, but on a lower income, a quarter (26%) are having to delay their retirement for financial reasons and a further 13% have adopted the ostrich position and are not thinking about their retirement finances.
Vanessa Owen, Head of Annuities and Equity Release said: “With people spending longer in retirement one of the challenges that many need to overcome is how to fund it and how to meet the financial demands they may face in later life, such as the cost of long term care.
“There are numerous ways that retirees can access the capital tied up in their home including deciding to downsize or take out an equity release plan. For those considering unlocking the money in their homes it’s important to seek professional advice and explore all of the options available in order to find the best solution for them.”
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For advice on equity release, contact our family law solicitors based in Edinburgh, Scotland, to find out how we can help you – click here to contact us or telephone 0131 208 2260.