Retirees ‘must withdraw £170,000 from their homes’ to beat rising costs

The report says the equity release funded £3bn of domestic spending by pensioners in 2021 – and is expected to rise to over £4bn this year. By 2032, CEBR forecasts that share release spending will exceed £11bn.

It said 26 percent of homeowners used the equity release to fund home improvements, while 17 percent used the money to pay for medical expenses. Pensioners also spent an estimated £480m on overseas holidays and financial planning.

However, one in four homeowners (28 percent) have accessed real estate assets in other ways, such as buying a home. by rescheduling, downsizing or taking out mortgages with annuity interest rates, with almost a third investing the money in renovations.

Around 23,400 pensioners have already taken in £1.53bn in the first three months of the year, according to the Equity Release Council – up 21 per cent on the same period last year. A further £190m has been released this year compared to the last three months of 2021.

Equity release is a way for homeowners age 55 and older to turn some of the value of their home into money in the bank. But the controversial plans can prove costly for homeowners, who risk losing the entire value of their home to lenders because interest is extended and added to the original debt. The loans are not repaid until the borrower dies or enters long-term care.

Legal and General’s Craig Brown said the report shows freeing up equity for homeowners is becoming a more common way to fund later life expenses. Retirees ‘must withdraw £170,000 from their homes’ to beat rising costs

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