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One in Three are retiring in debt

Posted on: 17 July 2020 by 50connect Promotions

With the State Pension Age due to start moving to 66 for men and women this year, the question of how to deal with debt in retirement is becoming a bigger conversation than ever before.

retirement debtHow can you finance the retirement you want?  Most of us have an idea of how we’d like our retirement to be. How to fund it, though, is often a different question. You may have been a modest saver over the years and have a reasonable income to cover your day-to-day expenses, but what if debt repayments are holding you back from being retirement ready?

With the State Pension Age due to start moving to 66 for men and women this year, the question of how to deal with debt in retirement is becoming a bigger conversation than ever before.

Key Equity Release have used data from a unique study into the finances and ambitions of 1,000 people who are expecting to retire in 2020*. The nationwide study showed that those retiring this year face significant debt. Out of the one in three retiring in debt this year, the average owed is £17,460; the amount taking three-and-a-half years to clear. Of those in debt, 48% still owe money on credit cards, 31% have an outstanding mortgage and 14% will still have an outstanding bank loan.

Remember, you should always think carefully before securing a loan against your homeKey Equity Release plans involve a lifetime mortgage, which is a loan secured against your home.

Using some of the wealth tied up in your home

Currently, over 65s in the UK have more than one trillion pounds worth of equity in their homes and increasingly homeowners are using equity release to unlock some of the tax-free cash tied up in their home to help fund a better retirement.

There are typically no monthly repayments to make, as the loan plus roll-up interest is repaid when the plan comes to an end. The amounts people release vary starting from £10,000, with Key customers having access to an average facility of £90,000 in 2019 — you could release up to 55% of your home’s value depending on age, health and lifestyle. Leading equity release experts Key always encourages discussing your decision with family as equity release will reduce the value of your estate and may affect your entitlement to means-tested benefits.

Some of Key’s plans offer a guaranteed inheritance feature, allowing you to protect a percentage of your home’s future value for your loved ones. It’s important that you consider your options.

Key Equity Release are encouraging people to consider their options when it comes to retirement financing. They understand we all have questions and are here to answer them.

CEO Will Hale said: “Equity release is not right for everyone, but it is vitally important that people are not prevented from considering how their largest asset, their home, can support them in retirement.”

Find out the answers to your questions about equity release for free:

Request your free guide below.

To safeguard your health, our expert equity release advice is now available in full over the phone, so call us free to find out more on 0808 208 0963

Lines open Monday to Thursday 9am—8pm; Friday 9am—5.30pm; Saturday 9am—5pm.

*Research conducted by Research Plus between 18th and 31st December 2019 among a sample of 1,000 people expecting to retire during 2020

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