Can Equity Release Improve Your Pension Fund?
With people trusting pensions less and less and predictions of many people not having sufficient income in retirement, sourcing alternatives has become popular. Equity release is one such alternative with the value stored in homes providing an additional source of finance.
However, how far can we say that equity release could improve a pension fund in retirement?
£767billion Tied Up in Housing Equity
For the majority of homeowners, their property will represent their largest asset and they will be regularly paying into this during most of their years at work. However, releasing equity isn’t a natural choice for many retired homeowners looking for additional finance to supplement income.
Equity release has the potential to unlock a tax-free lump sum from the value of your home, which can be used to finance any number of things, or just provide additional income in retirement.
In an article for Thisismoney.com, Dan Hyde claims that improved regulations for the equity release market are helping to make it more appealing. “The [equity release] market has improved significantly in recent years and now offers a genuine retirement funding solution for older people, according to experts.”
Furthermore, house equity rose by £2billion at the start of 2010 to suggest that there is a large pot of finance available to retired homeowners.
So, homeowners who wish to release some of the equity from their homes might be able to supplement a dwindling pension pot to enjoy the lifestyle they want.
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