Property wealth boosted the retirement standard of living for pensioners in the South West by more than £158.7 million in the first half of this year, according to new analysis from leading over-55s finance specialist Key Retirement.
Key’s authoritative Half Year Equity Release Market Monitor shows retired homeowners in the region made around £72,283 tax-free each on average by cashing in on their homes in the first six months of this year, underlining how important housing equity is to enhance the living standards in retirement. Total property wealth in the region released climbed 51% to £158.7 million from £105 million for the first half of 2016.
The detailed study, which also analysed the reasons for releasing equity across the whole of the UK, found the size of the pay-outs are having a significant impact on the standard of living in retirement, enabling pensioners to tackle a range of tougher financial issues. Three in 10 use some or all of the money to clear debts (including credit cards and loans) and a further 23% repay an outstanding mortgage.
The cash is enabling pensioners to treat their families as well, with 22% helping family members. However, the main motivation for using property wealth is to fund home and garden improvements with 64% using some or all of the cash to revamp their property.
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 the South West.
“Across the region a 51% increase in lending demonstrates just how popular equity release is in helping improve retirement finances. Equity release is a real alternative for over 55’s who are seeing traditional retirement income solutions squeezed by historically low interest rates, and pension incomes hit by historically low annuity rates.”