Retirees unlock property wealth to boost income
Recent research has revealed that retirees are unlocking wealth from their properties to boost their finances.
According to data from Key Retirement, demand for lump sum plans remains steady, with retirees releasing £71,500 on average. Whilst they now represent a 36% share of total sales, the proportion of enhanced plans is just slightly lower at 33%, recorded in the three month period to October.
Year on year, this growth is significant, with the figure from the corresponding period in 2016 being just 19%.
The same can be said for the total property wealth released, with the research indicating that the amount unlocked grew by 18% since Quarter 3 of 2016. The number of plan sales took an even more significant uplift, with sales growing 26% since the same time last year.
£71,500 was the amount of property wealth released by the average retiree, with a property worth £325,000. This figure rose in correlation with property values across the UK, with Londoners releasing an average of £133,000 from homes worth £655,000.
Every UK region saw a rise in sales of equity release plans, with the most significant annual growth observed in Wales at 51%.
Commenting on the statistics was chief product officer at Key Retirement, Dean Mirfin. He stated: “The new record for the third quarter means sales for the first nine months of the year have already nearly matched the total for all of 2016.
“The growth in sales of enhanced equity release to a third of the market demonstrates the importance of quality advice in ensuring that customers receive the maximum value or lending terms from their property wealth.
“Lump sum plans are maintaining their share of the market as they increasingly tend to be more appropriate for younger retirees looking to repay outstanding mortgages.
“Increased competition and rate cuts across the equity release market are enabling customers to dramatically improve their quality of life in retirement and address a wide range of financial issues.”