That’s according to research by Mintel which has discovered nearly half of over-65s have yet to put in place financial plans for later life.
As well as finding 20% of this age group had no savings or investments, it also discovered just half had written wills, carried out inheritance tax planning, prepared for long-term care or made decisions about future living arrangements.
But many people in this age group had large amounts of money tied up in equity in their homes and some said they would consider downsizing to fund their retirement.
Mintel’s research discovered the majority – 72%, of over 50s and 88% of those aged 72 and over – wanted to carry on living in their property for as long as possible. Yet only 9% of over-50s said they would expect to release equity, a process which would allow them to live in their home whilst gaining access to their funds.
Jessica Galletley, financial services analyst at Mintel, said: “Those who have just finished paying off their mortgage will want to enjoy their property for as long as possible.
“Choosing to stay in their home can also be about maintaining a certain standard of living and independence as people get older. Despite this, most over-50s are averse to considering equity release, seeing this as something that should only be considered as a last resort.”
But, Will Hale, CEO of independent equity release adviser, Key, said someone retiring at 65 years old could conceivably need to fund thirty or more years of retirement, and even with the most careful financial planning, it would be almost impossible to judge what their income and capital needs might be that far in the future.
Market growth
He said that while the research suggested only around 9% of over-50s expected to use equity release, the current growth Key was seeing in the market suggested when people actually confronted the reality of retirement, significantly more of them would consider how the equity in their home could be used to meet their needs and wants in later life.
He added: “We are increasingly seeing equity release being used as a normal part of retirement planning and the low rates and flexible features now available mean that these products are appealing to an ever more diverse range of customers.
“Whether paying for care at home, helping family members onto the property ladder or simply topping-up their income to improve their standard of living in retirement, equity release is benefiting more customers than ever before and in so doing is helping address broader societal issues.
“However, equity release will not be right for everyone and finding the best product or solution for each individual situation can be a complex process. Therefore, it is vital that customers get specialist advice.”
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