A State Street survey of nearly 10,000 people indicated that only 6% of workers would be able to afford the lifestyle they want during their retirement.
But why compromise on your lifestyle, when retirement is all about enjoyment, building memories with your loved ones, experiencing the holiday of a lifetime and simply having the peace of mind that everything is taken care of?
Predictions suggest that the equity release market will grow by a further 40% by 2020, which is no surprise, given the benefits people see in this solution as a reliable source of income in their later life.
Equity release was once perceived as a fairly restrictive product, however increasingly advisers are using it as an effective tool to boost a client’s retirement income. Unlocking capital from retirees’ homes is an effective strategy advisers can use in conjunction with other products. To help enhance clients’ finances, lifetime mortgages allow them to release tax-free cash without having to move from their existing home.
Some of the main reasons advisers choose Equity Release:
• Some products allow their clients to either release a one-off cash lump sum or a series of smaller lump sums to meet their individual needs.
• Roll-up mortgage products are where there are no compulsory monthly repayments and the borrowed amount, including the interest, is repaid when the property is sold.
• Some products allow clients to take an initial loan with an agreed amount ‘in reserve’, which they can take whenever they need. These type of products can also guarantee that this reserve will be there for 15 years from the date the mortgage is completed.
• Some products require a no-negative equity guarantee, so clients can never owe more than their home is worth.
This article has been written by Chris Smyth, Equity Release Business Development Manager at LV=
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