It’s no secret that the equity release market has been growing in recent years, with no signs of slowing down, despite the Covid-19 pandemic!
UK’s poorest retirees are suffering, as experts suggest their benefits amount to less than what is needed for a minimum standard of living. Of the 11 million retirees in the UK, 2.2 million individuals, or 1.6 million households, live with an average income of £200 a week.
The question on everyone’s mind is whether equity release is a passing phase, or is the rapidly expanding industry here to stay? Perhaps equity release is the life-changing solution that everybody’s been looking for.
We’ll help you discover:
- How you can take advantage of the equity release market growth.
- If there are pitfalls assocated with the industry’s expansion.
- Tips and tricks to help you decide if equity release is the retirement answer for you and your family.
We’ve got the inside scoop! As experts in the field, we’ve read all the literature, spent countless hours researching over 220 plans, and we’ve done the latest statistical analysis of the equity release market.
Is equity release fly by night or the industry to watch? Let’s find out now!
4 Reasons You’ll Be Sorry Ignoring the Growing Equity Release Market
What’s interesting to note is that there’s a high rate of homeownership amongst retirees in the UK. Therefore, later life mortgages truly cater for this niche market and offer an excellent solution to a growing problem.
Equity release continues to be a buzzword in 2021, and the reasons to not ignore the market are endless. Here are just a few:
- The industry is rapidly expanding, despite the challenges of Covid-19. Statistics indicate that in the first half of 2021, 9,898 plans have already been signed.
- You can access tax-free income with no limitations on what you can use it for. In addition, you can unlock further equity if your property price increase or you don’t select the maximum amount with your first withdrawal.
- The loan can be paid off using your life insurance when you pass away.
- The equity release market has become a legitimate and tightly run industry as years have gone by. High street banks have started offering plans and the market is securely regulated by the Equity Release Council.
3 Advantages of a Growing Equity Release Market
With 20% of the British population having to postpone retirement indefinitely due to Covid-19, more individuals are seeking solutions to make ends meet. Luckily, the advantages of the growing equity release market are endless!
Firstly, it’s about competition. As the industry grows and becomes a lot more competitive, interest rates continue to plummet. As things stand, interest rates are at an all-time low. If you’re over 55 years and own a home valued at over £70,000, you could be sitting on a goldmine.
Additionally, as the industry continues to grow, the consumer becomes more protected. The Equity Release Council works tirelessly to ensure that you’re kept safe when unlocking the cash tied into your home. Just be sure to use one of the top equity release companies on the market.
If you’re cash strapped, it’s probably worth mentioning that you don’t have to pay a cent in your life for your equity release plan. The money is paid back from the sale of your home when you pass away or move into permanent care.
Discover the essential: Equity Release Criteria
The Risks of a Leaning Into the Growing Equity Release Market
Like all financial products, there are also some risks to the growing equity release market. If you’re considering releasing equity from your home, it’s vital to seek professional guidance from an independent financial adviser.
Financial advisers will tread carefully when it comes to lower-income households and equity release. Experts reveal that a huge proportion of poorer homeowners inquiring about equity release are missing out on thousands of state benefits that they weren’t aware of.
In addition, an equity release should be seen as a last resort, as homeowners should save this solution for the rainiest of days. It impacts the amount of your family’s inheritance, so be sure to discuss this with your financial adviser.
However, there are fantastic benefits of equity release, so with the right advice, in-depth knowledge, and lots of research, equity release could indeed change your life.
Learn about: 8 Equity Release Pitfalls People ALWAYS Get Wrong
The Growing Equity Release Market vs. Traditional Mortgages
These days, one of the most common equity release uses is to pay off an existing mortgage.
Why? Here are 3 primary reasons:
- Interest rates are now competitive. Traditional mortgage interest rates are usually around 3% or slightly lower. Current equity release interest are between 3% and 4%, with rates as low as 2.3% being achieved.
- With equity release, you could score great rates if you’re elderly or unwell. The state of your health does not impact traditional mortgage rates.
- Best of all, there’s no obligations to make any repayments in your lifetime with equity release. This is unlike traditional mortgages where monthly payments are required.
3 Tips for Making Your Decision
- Get the best advice. Find a whole market adviser who specialises in equity release.
- Shop around. You’ll be able to take advantage of the best specials by having a holistic view of the market.
- Speak to your family. Equity release does impact them so make sure they’re fully aware of your decision.
Why Is the Market Growing?
The growing equity release market is due to more people than ever before living longer and being worried about what will happen when they’re no longer able to live on their own.
People are also looking for ways out of debt that doesn’t involve taking money from family or a traditional retirement plan like an IRA, which would cut them off from other sources of income in the future.
Is the Growing Equity Release Market a Good Thing?
Many people think that the growing equity release market is a good thing because it can provide seniors with more options in terms of what they want to do later on and give them an inheritance for their loved ones.
How Can I Make a Decision About Whether or Not Equity Release Is Right for Me?
There are many factors to consider when making this type of decision. You should first think about what you want out of life and what kind of lifestyle will work best for your needs and those around you.
For example, if someone wanted to live in their own home but also make sure that they got some money from an inheritance at the same time, then it would make sense to look into different types of plans which have these features included.
How Can I Find Out More About the Growing Equity Release Market?
There are many different options that you can investigate when trying to figure out what type of plan might work best for your situation, but it’s usually a good idea to consult with an expert in this area.
You may want to consider talking to a lawyer or financial advisor if you need help sorting through all of the information and deciding which option will work best based on your needs. Both professionals have experience in these fields and can provide advice on how they think their particular skills will meet any given person’s goals.
Equity release is a growing market that you shouldn’t ignore. It’s booming, despite a stressed economic climate. With retirement becoming harder to achieve and more of the UK’s elderly population feeling the effects of Covid-19, equity release provides relief for 1000’s.
What’s niche about the market is that homeownership is incredibly common amongst elderly Brits, even cash-strapped ones. So, if you fall into that category or have kids who need urgent financial relief, equity release could be the best solution.
With careful planning, you could unleash the retirement of your dreams. So yes, we do think that you should take advantage of the growing equity release market. But only after you’ve explored all alternatives.