One fifth of 25-34 year olds will use equity release as a pensions plan
It has recently been suggested that ‘pension poverty’ is likely to increase, as new research by AXA reveals some 64% of workers plan to rely on the state pension when they retire and the number of workers opting into occupational pension schemes falls.
Interestingly, the research also found that almost one in five 25-34 year olds plan to use the equity built up in their homes to support them in their later years.
Geoff Charles, Managing Director of equity release specialists Bower Retirement Services (http://www.brsequity.co.uk), can see how the trend to fund retirement in this fashion will continue to grow.
“Equity release is a perfectly viable way to help fund retirement; I think it should be more widely promoted by the government as a pension top up. Of course it’s important not to rely solely on the equity in a property as a means to live, but it could make a considerable difference to the quality of life in later years,” says Geoff, and he continues:
“The fact that a fifth of 25-34 year olds are already showing a leaning towards releasing cash from their properties to help fund their retirement shows that equity release is becoming more widely accepted. This is a generation with a new way of thinking: they are feeding a substantial proportion of their earnings into their property, so why not consider it a pension fund? People at retirement age now worry that equity release will mean they leave their children a reduced inheritance;
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