Property wealth boosted the retirement standard of living for pensioners in Yorkshire & Humberside by more than £30.4 million in the first three months of this year – more than £337,000 a day, new analysis from leading over-55s finance specialist Key Retirement shows.
Its Equity Release Market Monitor shows retired homeowners made around £54,250 tax-free each on average by cashing in on their homes in the first three months of the year with sales of equity release plans up by around 49% over the same period of 2016.
The detailed study, which also analysed the reasons for releasing equity across the whole of the UK, found the main motivation for using property wealth was to fund home and garden improvements with 62% using some or all of the cash to revamp their property.
The size of the payouts are having a major impact on the standard of living in retirement, enabling pensioners to tackle a range of tougher financial issues with 30% using some or all of the money to clear debts (including credit cards and loans)and a further 22% repaying an outstanding mortgage.
Families are also big beneficiaries with over one in five (22%) retired homeowners using money to help out relatives, including providing deposits to help with a property purchase. They are too making the most of the wealth in their homes for themselves as well – 32% used some or all of the money for holidays.
Dean Mirfin, technical director at Key Retirement, said: “Property wealth is making a huge contribution to retirement planning, and that is demonstrated by the growth in the value of equity being released in Yorkshire & Humberside.
“A large percentage of pensioners are also helping family members at a time when younger generations are feeling a tighter financial squeeze and the money released from properties can really be life changing. However, the biggest use of property wealth is to fund home and garden improvements, underlining how property wealth can help get your home retirement ready. Equity release is a growing alternative for pensioners who are seeing their savings squeezed by historically low interest rates.”
Anyone looking to release equity from their home can get Key’s independent guide to equity release by calling 0800 531 6027 or visiting www.keyretirement.co.uk/equity-release/free-guide/