Equity release helps retired home owners to cash in
Key’s Pensioner Property Equity index shows that over-65s in Scotland made an extra £12,000 each from their properties between May and August 2017.
The strength of the housing market means property wealth is making a major contribution to retirement standards of living as the equity release market expands.
Average equity release customers are cashing in £70,625 of property wealth.
Equity release, known as a lifetime mortgage, is only repaid either when you die or move into long-term care. Reasons people release property wealth include home improvements (64 per cent), clearing debts, with three in 10 pensioners using the cash boost this way, a third using it to fund holidays, and a further 23 per cent using it to pay off their mortgage. More than a fifth use it to help relatives.
Dean Mirfin, chief product officer at Key Retirement said: “The strength of the housing market over the three months has significantly boosted property wealth for pensioners making as much as £3,500 a month.
“Prices may not continue to grow as fast but pensioners who have paid off mortgages can still rely on tax-free returns no matter what happens in the short and medium term.
“The average homeowner is releasing through equity release the equivalent of the gains made since 2010 and property wealth is having a dramatic effect on the standards of retirement living for many thousands across the UK.”