Rise in single equity release plans as more UK over-65s live alone

The total number of over-65s living alone in the UK is on course to outnumber those aged under-65 for the first time on record within the next three years, according to new findings by the Equity Release Council (ERC).

The representative trade body for the equity release sector has estimated that more than 4 million over-65s will be living alone by 2020 – with this age group set to make up half of single-person households by 2022 – as life expectancies and the rate of divorce in later life increases.

With more over-65s living alone, the ERC said it has witnessed an increase in the number of single equity release plans being taken out by customers to help meet their later life financial goals.

CEO of the ERC, Jim Boyd, commented: “Living alone can be costly, as sole incomes are expected to stretch just as far to cover many of the day-to-day household bills. Added to this pressure is the fact that many of the retirees of today are set to face record long retirements as life expectancies increase, putting even greater demand on their pension pots as they’re expected to stretch further.

“In response to these trends, we’re seeing an increasing number of homeowners that live alone turning to equity release to supplement retirement income and help meet both day-to-day and long-term financial priorities.

“Along with financial support, equity release can also bring important social benefits for those living alone. By enabling homeowners to access the wealth tied up in their property without having to move, older homeowners are able to remain in their home and stay in their local communities with their friendship groups and familiar networks.”

Equity release enables homeowners aged above 55 to draw a lump sum or regular sums from the value of their home, while remaining in their homes, and without having to make monthly repayments.

The equity release market has grown considerably in recent years, with £3.94bn released from homes during 2018.

Group communications director at Just Group, Stephen Lowe, added: “The ERC has provided evidence that shows equity release business from single pensioners is set to keep on rising. It’s interesting to note that nearly double the number of new plans were taken out by single women as single men in the first half of this year. Of retirees in the lowest income groups, 45% are single women, 38% couples and 17% single men.

“Given the gap in pension provision between men and women, we foresee more growth in equity release advice driven by women seeking to supplement their incomes in later life, enabling them to stay in their homes and communities.

“Our view is that equity release works best when people have considered if and when they might access their housing wealth in enough time to make it integral to their wider pension and retirement planning."

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