More pensioners are turning to equity release to help them through the cost of living crisis

7th August 2023

Thousands of older people are at risk of seeing their retirement plans jeopardised due to the current struggles with the economic climate. With interest rates rising and the cost of living constantly increasing, many are entering retirement with unpaid debts and insufficient savings to comfortably finance their future.

The equation is simple: there is simply not enough money coming in to meet the demands of the costs going out.

With retirement on the horizon, or already in their retirement phase, many people nowadays are having to rethink their plans. Instead of focussing on how to enjoy spending their retirement funds, they are having to consider how to find the money to pay for the essentials during their golden years. Some are choosing to work longer hours, or even return to work to guarantee some form of income when their pension pot is not enough.

Between April and June 2022, drawdown savers withdrew £3.6billion of flexible pension funds according to HMRC data, up 23 percent on 2021. However, continuing to withdraw unsustainable amounts from their pension pots leaves some at risk of ‘running out’ of funds in the long run (1).

Will Hay, CEO of Key Retirement, says that almost a million of pensioners will find it difficult to repay their borrowings as the cost of living continues to rise (2).

So, what could be the solution?

An increasing number of older people are turning to equity release lifetime mortgages as a way of financing their retirement.

With careful consideration and the advice of an experience qualified Financial Advisor like Kevin Woods, equity release allows homeowners aged 55 and over to release a percentage of their property value as tax-free cash, whilst retaining ownership of their home. It can be used to generate essential cash, pay back existing loans, clear the mortgage, or to use as a retirement income for example.

Like any other mortgage, an equity release lifetime mortgage needs to be paid back to the lender, but with equity release, there are many options available. Some choose to pay back the interest on the loan and/or the capital in monthly or yearly instalments. Others choose not to make any payments and allow the interest on the loan to roll up. Then the final amount to be deducted from the value of their property when they either die or enter long term care. Some chose to protect a percentage of their property value for their eventual beneficiaries whilst releasing equity on the remaining value. The fact is that every plan is tailored to suit the different needs of the individual.

Equity release is not the right option for everyone, as it could reduce the value of your estate and the amount left as an inheritance for your loved ones. It is vital that you seek advice from an experience qualified professional like Kevin Woods before considering taking out an equity release lifetime mortgage. Kevin will discuss your specific circumstance, your plans and ambitions and only recommend equity release if he thinks it is the best option for you.


1. And (2): Daily Express, Jan 11th 2023

Why not get in touch and see how we can help?

Equity release could be the answer to some of your financial questions. If you would like to know more about it, and see if it could be the right option for you, please book an appointment or request a call-back

Providers include

Pure Retirement

Equity release will reduce the value of your estate and may also affect your entitlement to means-tested benefits. You should always think carefully before securing a loan against your home.

Unless you decide to go ahead with a plan, our service is completely free of charge, as our fixed advice fee of £1,695 is only payable on completion of a plan.

A lifetime mortgage is the most popular form of equity release, and is a loan secured against your home that’s typically repaid when you pass away or go into long-term care.