We think, and indeed expect, that our retired days will be filled with socialising, hobbies, holidays and a well-earned and equally prolonged period of relaxation. The truth, however, is often more bleak and dispiriting than most of us are willing to admit. Despite most of us knowing that stress and loneliness are often features of retired life, we all believe that ‘it won’t happen to me’. However, for the many people who find retirement a painful rather than enjoyable time of life, there could be a simple solution. The thousands whoare suffering the stress and financial strain of retirement are often surrounded by the possible answer to their woes: their home.
According to research conducted by the Equity Release Council, the average homeowner over the age of 55 has £241,000 of housing wealth at their disposal. This figure runs alongside the Council’s discovery that a large minority of over-55s are experiencing severe stress in their lives; stress revolving around money. According to the Council’s findings, 19% of over-55 homeowners have gone without a meal because of financial shortfalls in the last year, and 10% suffer this every single week. Furthermore, on a monthly basis, 30% have had at least one sleepless night; 19% have argued with a partner or family member about money; and 9% have felt cold because of an unpaid bill.
With these figures in mind, it would be irresponsible to try and ‘sell’ the equity release answer to anyone. What is shocking, however, is that people have to experience pain beyond stress when they have the housing wealth to alleviate some of their financial struggles. Equity release is one way in which this stress can be reduced; however, there are alternatives including downsizing, borrowing money, receiving help from relatives, taking in a lodger and several other options.
The only way to treat people with the stress and strain the Council’s figures reveal is to present a complete picture of their financial options; holism is the answer, and equity release must fit into this picture alongside downsizing and all other options. To help people pull themselves out of the mire of debt and penny-pinching, the use of housing wealth must become a more accepted solution. The progress of the equity release industry has been evident over the past few years’, none more so than during the record-breaking 2014, but we still have a long way to go. Downsizing, although a good fit for some, is not ideal for everyone and as many as 75% of over-55s say this option has very limited or no appeal. Equity release presents a valid alternative to downsizing whilst still delivering the cash injection that many require (plus the added bonus of not having to move house).
With the equity release industry consistently growing and modernising, the allure of our market has been too much for major high-street lenders like Santander and L&G to pass up. As we continue to progress as an industry, I hope that products and services also continue to evolve to meet the needs of our diversifying and growing client base. It is a tragedy that so many people have to suffer in a time that should serve as the reward for a lifetime in work. Therefore, it is essential that we go some way to curing this tragedy by allowing every retiree the opportunity to consider every possible avenue open to them.
