Many people use equity release to see them through retirement and boost their pension. But how much should you release to cover your needs? Mark Gregory helps out…
The Question
My husband retired two years ago, and I am about to retire in the next year. We are concerned our pension will not stretch to cover our lifestyle in retirement. I was self-employed so I only have the state pension and my husband’s pension is quite small.
We don’t have a mortgage, but we do have bills, shopping, home maintenance costs and grandchildren which all cost us money!
We would like to know if we can release equity but also how much of the equity in our home we should and/or could release to make sure we have a comfortable retirement. Our home is valued at £450,000 and my husband and I are aged 67 and 65 respectively.
Mark’s Answer
Firstly, I wish you both a long and fulfilling retirement. It’s entirely natural to feel concerned about whether your income will stretch far enough – especially with rising living costs and the joys (and expenses!) of grandchildren.
The good news is that, based on your ages and the fact that you own your home outright – valued at £450,000, you’re likely eligible for equity release. Specifically, a Lifetime Mortgage could be a suitable option.
This type of plan allows you to:
- Release a tax-free lump sum
- Keep full ownership of your home
- Access further funds later through a drawdown facility
Here’s how it typically works:
Lenders assess how much you can borrow based on the youngest applicant’s age (in your case, 65), your property value, and in some cases, your health. From there, you can take an initial lump sum to support your lifestyle now, while leaving the rest in reserve.
You can then draw down additional amounts as and when needed – providing flexibility to adapt to your future financial needs.
This approach helps you avoid taking more than you need upfront, which keeps interest costs lower and preserves more of your equity for the future.
In your case, equity release could help top up your retirement income while also giving you the freedom to support your family or cover unexpected costs without financial stress.
Another important consideration: based on your income, you might also be eligible for means-tested benefits, such as Pension Credit or Council Tax Reduction. Our advisers can assess this for you as part of a free initial consultation, ensuring that any equity release plan complements, not compromises your eligibility.
At Equity Release Supermarket, our independent, FCA-authorised advisers offer whole-of-market advice tailored to your needs. We’ll help you explore all your later life lending options and create a personalised plan to make the most of your retirement, without any pressure or upfront fees. To speak with one of our advisers – please call our freephone number 0800 802 1051
Meet our expert…
Mark Gregory, founder and CEO of Equity Release Supermarket, is here to answer your questions. Mark is an adviser himself with over 20 years equity release experience.
He launched Equity Release Supermarket 10 years ago and it has grown to become one of the UK’s leading equity release specialists.
Email kate.saines@emap.com to ask Mark a question
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