Over-55s raid own homes to beat cost-of-living hikes
THE over-55s now have a record £740billion of equity in their properties and are increasingly borrowing against their homes to raise extra cash and beat the cost of living crisis.
Soaring house prices have handed the over-55s an extra £10billion of equity in just three months, according to a new analysis by Canada Life, based on Halifax figures.
Londoners have spare equity averaging £178,680, followed by homeowners in the South East at £126,278 and East Anglia at £108,732.
Homeowners in the North East and Yorkshire had the least amount of equity available, with £54,489 and £65,385 respectively.
Canada Life head of marketing Alice Watson said the over-55s increasingly see their property as part of their retirement income, rather than a completely separate asset. “Equity release has a valuable role to play in helping today’s homeowners enjoy retirement,” she said.
Older homeowners are expected to withdraw more than £4billion worth of equity this year, according to research from advisory firm Key.
Andrew Morris, senior equity release adviser at Age Partnership, said homeowners facing a deficit in their retirement income should consider equity release to generate tax-free cash: “It is available to homeowners aged 55 and over, with a home valued at £70,000 or more.”
The money can be released as a lump sum or as smaller sums, with the money and interest repaid when you die or go into long-term care.
It will not be right for every situation. Morris added: “Other options include a retirement interestonly mortgage, downsizing, working later in life or help from family.”