Equity release is not necessarily confined to older home owners as the money released can be used for anything.
This could prompt those still 10 years away from retirement to look at releasing equity in their house to improve their lifestyle.
The chart above to the left shows the rise in house prices between 1983 and 2011 which has fuelled the growth in equity for many older homeowners.
The chart
to the below left shows the projected growth in the over 60's population in the UK.
When the dual factors of increasing population and many people having equity 'stored up' in their homes are combined with the factors below, Just Retirement believes that there is a considerable untapped market for equity release in the UK.
In our opinion, the growth in demand for Equity Release can be attributed to a number of factors:
- As the baby boomers reach retirement age, the gap between the life they would like to have and the life that their pension and investment income will allow them, has grown considerably
- Many over 60’s are equity rich but yet in all other forms of wealth are relatively poor
- The decline in final salary pension arrangements and the general increase in the cost of living in the UK has led to those approaching retirement having shortfalls in pension funds and savings to support their retirement income needs
- Many retired people live on fixed incomes which can be particularly vulnerable to rises in the cost of living in life's essentials (food, utilities etc)
- The general acceptance that for most people, their one major asset (their house) can and should be used as part of their overall income planning in retirement
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