Retirement Boost! Pensioners Save £300 Million on Home Loans

If you’re nearing retirement, or already enjoying your golden years, you might be able to save a lot of money on your home loan. New figures show that people who have taken out “equity release” loans have saved a massive £300 million over the last two years, simply by paying back some of their loan early.

What is Equity Release?

Equity release is a way for older homeowners to get cash from the value of their homes, without having to sell up. It’s useful for those who want to enjoy their retirement more comfortably, help their family, or cover unexpected costs. But for a long time, people who wanted to pay back their equity release loan early often faced penalties.

More Flexibility, More Savings

But things have changed! The good news is that many equity release loans now let you pay back your loan early, without any extra charges. This means you can use any extra cash you might get, like a lump sum from a pension or inheritance, to reduce your loan quickly. And the quicker you pay it back, the less interest you’ll have to pay in the long run.

More People Paying Back Early

According to the Equity Release Council, 360,000 people have paid back part of their equity release loans early in the last two years. That’s a lot of people taking advantage of the new rules.

The Numbers Speak for Themselves

  • In 2022, people paid back a total of £102 million early.
  • In 2023, that number rose to £120 million!

That’s an increase of 18% in just one year!

And the average amount people are paying back early has also gone up. In 2022, the average repayment was £538, but by 2023, it had jumped to £697, an increase of 30%. It seems people are getting more confident about managing their money and taking control of their finances in later life.

Expert Insight

Tom Philips, an expert in equity release, says: “This shows that people are becoming more savvy about managing their finances in later life. Paying back a loan early is a smart way to save money in the long run, and the new flexibility in equity release products is making it easier than ever to do this.”

Take Control of Your Finances

So, if you’ve got an equity release loan, it might be worth checking if you can pay back some of it early. You might be surprised how much money you could save. And remember, it’s never too late to take control of your finances.