Using Equity Release as Part of Future Planning
With 39% of people in the UK likely to be dependent on the state pension when they retire, planning for your future has once again become a prominent issue. As a result of this, equity release schemes could feature as a viable financial tool in the future.
Releasing equity from your home could also continue to grow in popularity after the Royal Institute of Chartered Surveyors (Rics) predicted that the current upward curve in house prices are likely to continue.
House Price Rises Could Encourage Equity Release Schemes
Rics indicated that, in October, the balance of surveys reporting price rises grew to 34% from 20% in the previous month, indicating the strongest survey result in favour of house price rises since December 2006.
With figures from the Nationwide reporting further house price rises in October more homeowners could benefit from an equity release plan. A statement from Rics quoted on the BBC said,
“The most recent survey provided further evidence that activity levels also continue to improve, albeit at a slightly slower pace than in previous months [but] a shortage of supply still seems to be limiting activity in the housing market.”
An equity release scheme could also help supplement income in retirement, especially if Department of Work and Pensions figures are accurate. They suggest that half of UK adults don’t have a personal pension and that by 2030 the basic state pension will only be £2,500, based on today’s income earnings.
Equity Release Could Help Supplement the Shortfall in Pensions
These revelations have prompted The Nottingham Building Society to hold a number of seminars for local people to discuss the possibilities of funding retirement. It is expected that equity release schemes will feature amongst these seminars as they have the ability to unlock a lump sum or regular payments to boost earnings in retirement.
The Nottingham seminars will take place between 11th and 18th November at their West Bridgford and city centre branches. An additional event will be held in Grantham on 25th November.
Lorraine Giddings, head of the Nottingham’s branch network commented, “Local people have a real desire to sort out their long-term financial situations. But we are discovering many don’t really know where to start.”
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