Category: Retirement Planning

Perceptions about retirement are changing with many people expecting to continue in work beyond their normal retirement dates. Often they will be disappointed because employment can end sooner than anticipated due to unforeseen events. The financial implications will be severe for those with inadequate pension incomes and savings.

Potential Early Redemption Charges (“ERCs”) discourage consumers from entering into Equity Release plans. With the duration of a Lifetime Mortgage often extending for over 20 years, people may wish to redeem them early when their personal circumstances change as they get older. A more flexible policy towards ERCs is at last being applied by some Providers.

Research suggests that most of us underestimate our life expectancy and hence do not make adequate provision for retirement. Following the recent Budget, the Government is so concerned that it is likely to become a requirement for people to be given an indication of their life expectancy at the point of retirement to discourage them from depleting their retirement savings too quickly. Equity release plans are likely to become increasingly popular as alternatives to Annuities.

Greater freedom with pensions could cause people to withdraw higher cash sums during the early years of retirement. In some cases, equity release will be deferred to a later date and hence the age profile of lifetime mortgage applicants could increase. The home is however likely to remain a popular source of income in retirement.

Several recent surveys illustrate that too few of us are preparing ourselves for the financial needs of retirement. Many people are getting themselves into debt after they stop working in order to enjoy the early years of retirement. Equity Release Plans are now widely acknowledged as being an effective method of helping ageing people cope with the financial demands of retirement

Although it is becoming more important than ever for them to do so, employees are not investing enough for their retirement. If they are lucky enough to be homeowners, many people consider that their property will be the best source of pension income. This is a major reason why enquiries about equity release plans are increasing from people aged in their late 40s and 50s.

Your retirement is your decision; whether you’re a bit of a spender or a stringent saver, finding the right strategy to complement your lifestyle can be difficult – speaking to a retirement specialist can help.