Pensioners are Using their Homes Less for Emergencies

It seems like things are looking a little brighter for people who are nearing retirement, with a new report showing that pensioners are less likely to be dipping into their home equity to cover bills or unexpected costs.

Less reliance on equity release

A new report from Legal & General Home Finance shows a drop in the number of customers using equity release to cover their day-to-day living costs or to handle surprise bills.

Fewer people are taking out a lump sum to cover living costs. In fact, the number of people doing this has fallen by 16% over the past year. And even fewer people are using drawdowns, which allow you to take out a little bit of money at a time. The number of people using drawdowns to cover living costs has dropped by 9%.

Similarly, the number of people using lump sums for emergency funds has fallen by 12% and drawdowns for this purpose have decreased by 19%.

Turning to longer-term goals

So what’s going on? Well, it seems that as the cost of living pressures ease, more people are thinking about using their home equity for longer-term goals.

For example, there’s been a huge increase in the number of people using equity release to pay off their mortgages. In fact, almost 40% of Legal & General Home Finance customers now use equity release for this purpose. That’s a 58% increase compared to last year.

There’s also been a big jump in the number of people using equity release to consolidate their debts. A quarter of all customers are now doing this, an 18% increase on last year.

Good news for pensioners?

This is good news for people who are worried about their finances in retirement. It shows that things might be getting a bit easier for some people, and they might not need to rely on their homes as much for emergency funds.

Of course, it’s important to remember that everyone’s financial situation is different, and some people may still need to use equity release to meet their needs. However, this new report does suggest that things are moving in the right direction.

What is equity release?

Equity release is a way for homeowners aged 55 or over to unlock cash from their property. You can take out a lump sum or drawdowns, which allow you to take out money over time.

It’s important to remember that equity release is a complex product, and it’s crucial to get independent financial advice before making any decisions.