The Equity Release Council has written to the government arguing for “housing wealth” to be included in the design of the pensions dashboard, so people are better able to see how it can support them in retirement.
Responding to the Department for Work and Pensions consultation on the dashboard yesterday, 28 January, Equity Release Council chairman, David Burrows, argued that people need a “complete overview” of their wealth in order to make the best decisions when funding their retirement.
According to the Council, 69 per cent of over-45s regard their housing wealth to be worth more than their pensions, savings and investments combined, while 46 per cent see it as a key part of their retirement planning.
“As the consultation identifies, life expectancy and standards of living have grown for the generations now nearing retirement, and there is a danger that many of this generation have inadequate savings to cover an uncounted for period without income,” Burrows said.
“Equity release provides an important option to meet this shortfall. In order for individuals to make informed choices it is key that they understand the true value of their housing wealth and we would therefore welcome this asset class included in the dashboard.”
The UK housing stick is valued at £7.29trn, and homeowner equity equating to £3.8trn, with 43.5 per cent of that held by people over 65.
Personal Investment Management and Financial Advice Association (PIMFA) senior public policy adviser, Simon Harrington, tweeted: “This is, all things considered, a terrible idea which will only end badly.
“I think equity release is a largely good thing that almost certainly will become more valuable to people as we continue to live longer than we're supposed to. But to bunch it up with accumulated private savings as part of an illusion of 'holistic wealth' is...bad.”
Overall, the pension industry members have expressed their excitement for the pensions dashboard in their responses to the government’s consultation, which closed yesterday at 11pm.
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