Why delayed retirements could drive appetite for equity release advice

Sharing an article from Professional Adviser by Paul Bridgwater of One Family regarding the stress that the pandemic has put on finances.

equity release

As people in their 50s navigate the financial 'perfect storm' brought on by the pandemic advisers will play a key role in helping them make the best of a bad situation, writes Paul Bridgewater, and equity release could provide safe harbour...


As we navigate out of the pandemic and the dust settles, many over-50s will be looking for a way to get back on track after the financial rollercoaster of the past 18 months. Figures from the Centre for Ageing Better suggest that this age group has been hit hard by the pandemic, with the number of over 50s in work having decreased by 181,000 since February 2020, while more than 540,000 people were still on the furlough scheme as it came to a close at the start of autumn 2021.

These shortfalls in income, along with increased living expenses, have led to many over-50s needing to dip into their savings. More than one in three (36%) over-50s have spent some of their nest egg in the past 18 months. On average, this age group has used £2,000 of their savings to cover essential spending.

In addition to covering their own financial shortfall during the pandemic, over-50s also often had family members who may have needed additional support. One in six (17%) over-50s have used their savings to help financially squeezed adult children to stay afloat.

Reevaluate retirement plans This ‘perfect storm' of financial pressures has meant that, for some, there's a need to re-evaluate their retirement plans. Recent research conducted by OneFamily found one in eight over 50s is planning to stay in the workplace longer due to the impact of the pandemic, which would see the equivalent of 3 million people delaying their retirement. While the average additional wait is three years, 12% of those delaying retirement expect to be working for at least seven additional years.

But what does this mean for financial advisers? OneFamily's research suggests that 10% of over-50s would consider using equity release to access value from their house if it meant they could retire earlier.

This means that there is a lot of scope for the popularity of the product ­to grow as those who have been forced to change their retirement plans look to free up wealth held in the form of bricks and mortar.

Currently, 58% of 55-64-year-olds own their home outright and this increases to 76% among 65-74-year-olds, Statista reports. So even if many in this age group have been hit hard financially, they do have options. Options they will need an adviser to help them to explore.

Cost of care As well as offsetting holes in savings from the pandemic, equity release could help ease concerns around the cost of care in the future and the resultant pressure on family finances among younger generations. It might also be used to improve or adapt property to allow for the more complex needs of later life. This can enable people to stay in their family home, where they may have happy memories, rather than be having to contemplate the upheaval of moving to a smaller retirement property.

Of course, equity release won't be the right solution for everyone who has had to dip into their savings in the last 18 months. It's a decision that needs to be weighed up carefully with input from family members. But for some, it has the potential to help them to keep their retirement plans on track.


If you would like some additional advice on your retirement funds, why not contact us to see how we can help. Over the pandemic we have assisted many customers wide variety of needs and can work with you and your family to find the right solution for you.


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