Equity Release: Spending Money in Retirement

A guide to how an equity release scheme could help you enjoy retirement

Equity Release: Spending Money in Retirement

When most people think about retirement they think about all the spare time they will have to fill.  For some this is daunting while others may be looking forward to enjoying this extra time with their close family and friends.

We take a look at how retirement can be a costly period and sometimes a difficult one to fund, how equity release can be used to boost a pension and what this money can be used for.

Equity Release

For many people retirement is a period of their life which they feel they can relax in and enjoy without the stress and strains of full time employment. 

For others, retirement may be a scary prospect as they are so used to the weekly routine of going to work, and are unsure how they will fill their time.

Either way, retirement is a time to sit back and do all the things you wanted to do when you were working but did not have the time.  For those who have paid off all or most of their mortgage, any funds they require which their pension does not provide could be released from the equity in their home.

Equity release can be a good way to free up money to help people take early retirement, or it can release funds to help people fully enjoy their retirement.

Some people for example may consider releasing a lump sum in their current home to buy a smaller holiday home abroad. Retirement can be the perfect time to use a holiday home as retired people may wish to stay abroad for longer periods, for example six weeks over the winter months, as opposed to just using it for a two week getaway.

Others may prefer to help their family out while they are still around to see them enjoy it and make the most out of it.  For example, those with adult children may find that in the current market their children are struggling to save enough money for a deposit on a house. An equity release plan could help people free up some money in their own home to help their children get on the property ladder. Some people may want to support their grandchildren with costs such as university tuition fees, whereas others may simply want to give their close family a treat by paying for a family holiday together.

For those who do not want to downsize their home equity release could be an option.  Equity release plans enable those in retirement to free up equity in their home while still being able to live there, meaning their lifestyle need not change.

There are other reasons why some people choose equity release over downsizing in retirement.  Sometimes there is not a suitable property to move to, or one which would release the required equity.  People may simply have friends in the neighbourhood where they currently live, or they may wish to remain in their large house as they want their family to be able to come and visit.

For some, home improvements may be the reason they need to release equity in their home.  Their income or savings may be inadequate to support these costs and equity release could help. 

If you are thinking of an equity release scheme to boost your pension, then it may be worth first of all finding out how much you could receive with an equity release calculator

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