More over 55s are turning to equity release as a way of funding their retirement because of concerns over the size of their pension pot.
That is according to research by SunLife, which discovered 43% of people in this age group were worried the money saved in their pension would run out before they died.
Meanwhile, a fifth of those questioned for its survey said they felt worse off than they thought they would be by their age.
Factors such as the cost of living and poor interest rates denting their saving were among the reasons cited by survey respondents to explain why they were not comfortable as they had hoped.
SunLife said the average pension pot for the over 55s stood at £105,496, they had around £280,000 of equity in their homes and eight in ten homeowners were ready to use their housing wealth to fund retirement options.
A third, it said, would consider equity release to access some the value tied up in their home.
Dean Lamble, CEO of SunLife, said: “In some ways there has never been a better time to retire – we’re living longer, enjoying healthier, more active lifestyles, and thanks to the new flexible rules around pensions, we have more freedom to spend our pension savings as we choose.
“But with the average pension of someone over 55 around £105,000, many don’t want to take out a lump sum and so reduce their pension income further, and people are clearly worried they haven’t got a big enough pension to fund their retirement.”
SunLife’s research found that fewer than half of people aged over 55 were planning on leaving their house as an inheritance. Indeed, only one in five younger people was relying on an inheritance.
Dean Lamble added: “Instead they are realising the potential of an asset that’s risen in value markedly over the years by turning to equity release.”
The average sum arranged for equity release, according to SunLife, was £101,000 – almost identical to the average pension pot.
