More and more people are finding new ways to boost their income and enjoy their golden years. Equity release plans are becoming increasingly popular, and the latest figures from Pure Retirement show some interesting trends.
The Average Age is Dropping
In the first half of this year, the average age of people applying for equity release plans from Pure Retirement was just 69. This is a significant drop from the average age of 74 seen back in 2018. It seems that younger people are realising the benefits of unlocking the value of their homes to help fund their retirement plans.
Property Prices on the Rise
The average house price of those applying for equity release has also increased. In the first six months of this year, the average property value was nearly £416,000 – the highest average seen since 2021. This suggests that more people with valuable homes are considering equity release as a way to access their wealth.
How Much are People Borrowing?
While most people are taking out equity release on homes worth under £400,000 (62% of cases), a significant number are borrowing against homes worth between £400,000 and £700,000 (26% of cases). This means that the amount people are borrowing is increasing, allowing them to access more money to enjoy their retirement.
Lump Sum vs. Drawdown
The traditional way to access equity release funds has been a lump sum payment, but people are now choosing more flexible drawdown options. Drawdown plans allow you to take out smaller amounts of money when you need them, rather than receiving a large lump sum upfront. While lump sum plans still dominate (53% of cases), this is the lowest share on record for Pure Retirement, with drawdown plans becoming more popular.
Joint vs. Single Lives
Equity release is often taken out by couples, but more people are also choosing to secure a plan for their own future. In the first six months of 2024, 58% of equity release plans were for joint lives, while 42% were single life plans. Interestingly, a slightly higher proportion of single life applicants are women (67%) than men (33%), which is similar to the proportions seen back in 2021.
What Does it All Mean?
The latest figures show that equity release is becoming increasingly popular with a wider range of people. This is partly due to the rising cost of living and the desire for people to have more control over their retirement finances. Equity release can be a valuable tool for those looking to access their home equity, allowing them to enjoy a more comfortable and secure retirement.
If you’re considering equity release, it’s important to seek advice from a qualified financial advisor. They can help you understand the different plans available and choose the best option for your individual circumstances.