A house is far more than simply a home. It’s also an enormously valuable asset, which can help you meet the costs of retirement.
In truth, most of us aren’t saving enough to cover our retirement needs. A recent study by Prudential found that more than half of those planning to retire this year have worked beyond state pension age, with many pointing to a lack of money as the reason. Around 1 in 12 said they simply could not afford to retire before they reach the age of 70.
However, the value tied up in our properties represents a potential answer for some with insufficient savings. According to Key Retirement, the property owned by the over-65s is worth over a massive £1 trillion (£1,000,000,000!)
A person’s home is their castle, but it may well be their pension as well. The huge rise in house prices in recent years means that a property is an enormous asset and should play a part in your financial planning for retirement. It can provide a significant supplement to homeowners, no matter how big or small their personal pension is. So how can people tap into that money?
One answer is to downsize to a smaller property. These will usually be substantially cheaper, meaning that you can move into a property which is less difficult to manage and bank thousands of pounds to supplement your pension.
But if you don’t want to leave your property, perhaps because of sentimental reasons or because it is close to family, then looking to remortgage may be an option. However, some lenders are less than eager to lend to people in their later years, so it may not be possible. Your chances of successfully remortgaging will depend on your individual circumstances.
An increasingly popular option is equity release, where you essentially unlock some of the equity you have built up in your property. Interest in equity release is at record levels and in the first half of 2017, retired homeowners cashed in £1.25 billion of housing wealth, according to Key Retirement. While these products are more expensive than remortgaging, they provide a useful alternative and should allow you to leave some form of inheritance for your loved ones after you pass away.
Interested to see how your property can supplement your retirement or be left to your loved ones after you’re gone?
In addition to helping clients put in place robust provisions and valid documents, to protect their loved ones and their assets both during their lifetime and after their death, Heir Tight Wills works with an array of high quality Financial Advisors, to assist their clients who don’t currently work with one. For a FREE Consultation to discuss writing or updating your Will & estate planning provisions, or for assistance in reviewing your financial situation, contact Rachael Rodgers on 0845 519 7585, or CONTACT US via email.