Supplementing Your Pension in 2022

Discover These Amazing Secrets of How to Use Your Property to Finance Your Retirement

Contributors: Nicola Date, Katherine Read. Reviewed by Francis Hui

Are You Wondering How You'll Survive Financially When You Retire? The Average Pension Doesn't Have Enough to Maintain a Comfortable Lifestyle & Some Retirees Have No Other Assets or Income Streams That Can Provide for Them. In This Article, We're Going to Unlock How Property Is Used to Supplement a Pension.

Before You Start Reading...

How Much Can You Release? 👇

 

Equity Release Calculator

Value of Your Home?

50000

Drag me

🔒 100% Safe & Fast

Featured In
yahoofinance marketwatch
Audio Thumbnail
Sound Bar

5 Key Steps Towards Supplementing Your Pension Using Your Property

Financing retirement has changed over the years. The more debt-free your retirement is, the less likely you need government assistance in old age.

You can use your property as an investment – if you start investing in the property while working and continue after retirement.

This would mainly be through a buy-to-let scheme and could help you grow your wealth without needing to do extra work.

There’s never been a better time than right now, where there’s such variety available.

It doesn’t matter whether you’re looking at homes with gardens or apartments – what matters most is that you can find something that fits your needs perfectly.

2 Ways to Use Your Home to Finance Retirement Other Than Equity Release

Downsizing 

Downsizing is a great way to supplement your pension1 if you’re looking for an apartment or a townhouse.

They also often come with amenities that make them well-suited for downsizing (for example, built-in storage).

In addition, since apartments tend to cost less than homes, it could mean that any savings made from not having to maintain the property will go towards other costs such as travel.

On the other hand, many retirees choose their location due to affordability rather than proximity to their family, so the downside might be feeling isolated from family members who may reside far away.

Feelings of isolation and loneliness are terrible for mental health. It’s essential to make sure that somebody is nearby for any in-person needs like going to the doctor.

It also might be good if people who live nearby can help out with more demanding tasks such as grocery shopping.

Some retirees may not have kids themselves, so they may need someone close by if they don’t feel comfortable driving independently due to a health concern.

Letting Out a Room

This is a way to generate some additional income to help you when it’s time to retire.

You can use the rental income as a supplement or even live in one of the rooms yourself and rent out the other space.

In addition, you could list your home on Air BnB2, constantly meeting new people from all over the world.

8 Reasons Why Equity Release is an Excellent Choice

An equity release scheme can supplement pension income by unlocking cash from a property like a house. Here’s 8 reasons why equity release is a good thing:

  • It’s an easy access to cash flow3.
  • Relieves future worries about unexpected expenses.
  • Allows retirees to get back some of what they paid off during their lifetime through a home loan or mortgage4, with monthly repayments, based upon how much money is available from the value of the property.
  • An equity release plan can offer peace of mind about future expenses while still owning your own home.
  • It’s tax-free income.
  • Equity release schemes are a type of mortgage insurance that protect lenders if you fail to repay your loan on time.
  • It also protects you by giving you peace of mind in retirement even though it does mean that when you die there may be less equity in the property.
  • Lastly, it can be a great way for people to supplement their income and provide them with some of what they have earned over the years, while still retaining ownership.

Things to Consider

  • You will need to be sure that your home has some equity left in order to secure funding – which means looking at how much mortgage debt is still outstanding and working out if this would provide enough funds for equity release.
  • You’ll need to work out whether or not property prices in the UK have been drastically changing over recent years because they could well affect any equity release plan as repayment amounts might change too.
  • When choosing an adviser make sure they have good qualifications and experience, this way you can feel confident that everything is being done properly.  

Common Questions

How Do You Determine If There's Equity Left in Your Home?

Is Equity Release with Property Suitable for Me?

In Conclusion

While there are additional ways we discussed above, equity release is also a great way to supplement your pension and financial situation.

In addition, it allows you to release equity in stages if that suits you best.

When deciding how much property you can use to supplement your retirement income, one thing to consider is whether there’s enough equity in it relative to the property’s value.

If not, it may be better to use other forms of equity such as cash savings or shares.

Have a look at the equity release alternatives and get in touch with your financial adviser to find the best moves for you and your family.

Editorial Note: This content has been independently collected by the SovereignBoss advisor team and is offered on a non-advised basis. Sovereignboss may earn a commission on sales made from partner links on this page, but that doesn’t affect our editors’ opinions or evaluations. Learn more about our editorial guidelines.

rachel w

Rachel Wait
Personal Finance Journalist

Rachel is an experienced finance journalist and editor with a particular interest in personal finance and consumer affairs. She has vast experience writing about money issues, property, insurance, and consumer affairs, and you’ll find her articles regularly featured in top media and newspaper publications.
John Lawson

Written by
John Lawson
Founder SovereignBoss

John is passionate about education and has made it his life-long mission to assist UK citizens on their future financial options, with a specialist interest in equity release, and SovereignBoss is the natural extension of this passion.
francis

Reviewed by
Francis Hui
Senior Risk Manager

Having held various high-level roles across the industry, Francis is truly an expert in aiding UK citizens in their financial decisions and risk analysis. His unique insight and statistical knowledge make him the perfect person to help you take your financial future to the next level.
kath icon

Katherine Read
Consumer Affairs Writer

Since joining the editorial team at SovereignBoss, Katherine has become focused on bringing transparency to finances and opportunities for those approaching retirement age. She writes on the topics of equity release, home reversion, and mortgages.
nicola

Nicola Date
Writer & Journalist

Nicola is a financial writer for SovereignBoss and is passionate about the opportunities that equity release can open up for homeowners. Her extensive business experience and deep understanding of the industry means that she’s always up-to-date with the latest developments.

See How Much You Can Release 👇

Use the QUICK form below.

 

Equity Release Calculator

Value of Your Home?

50000

Drag me

🔒 100% Safe & Fast

As Featured In
yahoofinance marketwatch