More than £4bn of retirement spending is set to be funded by equity release this year, with the figure predicted to more than double by the end of the decade. Equity release now funds £1 in every £90 spent domestically by retired people, according to research by insurer Legal & General and the Centre for Economics and Business Research (Cebr). It found that equity release is predicted to account for £9.3bn of retirement spending by 2030 and hit £11.4bn by 2032. One in 20 homeowners uses equity release to fund their retirement now, a figure that L&G and Cebr estimate will rise to one in 10, with the average amount of equity released set to rise above £170,000 within the next five years. In terms of how retirees spend the money secured from equity release, the majority (£1.9bn) is spent on big purchases such as home improvements, furniture or new cars, while £1.3bn is spent on food, clothes, transport and entertainment. The research also found that equity release is likely to play an increasingly important role in financing care-related expenses, with 19% of prospective homeowners citing it as a consideration.
Daily Express
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