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Retirement - old person with walking stick


Many people approaching retirement age find the cash pot built up in pensions is insufficient to fund a comfortable lifestyle. If you’re in this position you may well be looking at the benefits and drawbacks of equity release schemes. You’re not alone in planning to utilise property equity to help fund retirement, around 3.9 million people in the over 50 age bracket are making similar plans.


What options are there for releasing equity from my home?


Prices of properties have increased by around 300% in the past 25 years, and it’s estimated that the over 50’s age group owns £2.3tn of the total £4tn UK property wealth. This makes it even more attractive to release some of the cash that’s tied up in your home to help eke out low pension pots in retirement.


Some options to consider include:


Equity release schemes


Equity release schemes provide cash advances in return for a lifetime mortgage on the family home. Costs and interest rates on these schemes can roll up to high levels, however. In the current situation where interest rates are anticipated to rise, taking on an equity release scheme could mean reduced cash available for inheritance purposes.


Buy-to-let property


Releasing cash from the family home to fund a buy-to-let property may seem like a good idea. But the government is cracking down on buy-to-let landlords now, so rental profits may not be as high as anticipated due to cuts in tax breaks. Furthermore, the property market is in a downswing at present and the price paid for a buy-to-let property may not increase considerably over the short term.




Downsizing remains a popular solution for homeowners approaching retirement. It’s likely the family home is far too large for many people as they grow older, particularly once children have moved on and established their own lives. So, selling property and accessing equity of between £50,000 and £100,000 from the family home really does seem an attractive option. It’s important to think about the costs of moving, however, charges such as stamp duty, removal costs and estate agents/solicitor’s fees should all be factored into the equation.


If you need quick access to the cash tied up in your home, National Property Trade can help. We buy any house and can give a guaranteed cash offer within 30 seconds. Get in touch for more details.


retirement by Sole Treadmill licensed under Creative commons 4

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