The Equity Release Council recently conducted a study that has revealed a growing trend among UK homeowners in using their properties as a source of funding for retirement. The study, which surveyed 5,000 UK adults, discovered that 60% of homeowners are contemplating using their properties as a source of income in their later years, indicating an increase from 57% in 2021.
Furthermore, the study identified a change in attitudes towards using property as a retirement fund, with only 26% of homeowners dismissing the idea of accessing money from their homes in later life. This suggests a shifting perspective on mortgage use in later years, with nearly two in five homeowners believing it is becoming more common (39%) and acceptable (39%) to have a mortgage in later life, up from 34% in 2021.
Of particular interest, the study found that 46% of homeowners aged 55 and over perceive property wealth as a means of meeting their later life needs, indicating a strong reliance on property as a retirement asset. Even among younger homeowners, the inclination to use property wealth in later life is significant, with three in four homeowners below the age of 55 open to leveraging their property wealth in their later years.
Jim Boyd, CEO of the Equity Release Council, emphasised the evolving relationship people have with property wealth, highlighting the increasing view of property as an asset rather than simply bricks and mortar. He stressed the importance of supporting individuals in exploring all their options for funding retirement, whether it be through pensions, property, or investments, as one-size-does-not-fit-all.
Similarly, Mark Gregory, founder and CEO of Equity Release Supermarket, echoed Boyd’s sentiments, pointing out that changing consumer behaviour and attitudes towards borrowing into retirement has created a growing demand for equity release products. This is compounded by a decline in pension provisions, savings, and longer life expectancy, leading people to seek ways to borrow in later life to meet various financial needs.
The study’s findings have shed light on the evolving landscape of retirement funding and the role that property wealth plays in this. With more homeowners considering property as a viable source of income in their later years, it is crucial for individuals to have realistic conversations and explore all available options to ensure a secure and comfortable retirement.
In conclusion, the study’s results indicate a notable shift in attitudes towards using property as a means of funding retirement, with a growing number of homeowners viewing their property wealth as a valuable asset for meeting their later life needs. As the retirement landscape continues to evolve, it is essential for individuals to consider all avenues for retirement funding and seek expert advice to make informed decisions about their financial future.