Those approaching or in retirement are all too aware that their retirement pots need to stretch further than ever.
Recent data from the Office for National Statistics (ONS) outlined that between mid-2022 and mid-2032, the number of people of state pension age is projected to grow by 1.7 million, representing a 13.8% increase.
While living for longer is something that should be celebrated, for many, this will also be accompanied by an anxiety as to whether their retirement pot will stretch as far as it needs to.
Supporting all circumstances
Financial advisers should explore all options with their clients when supporting them to achieve their long-term goals and anticipate a longer-lived retirement. In some cases, that may include opting to supplement pension savings with property wealth.
Legal & General’s (L&G’s) analysis of ONS data indicates house prices in England and Wales have increased by 20% over the last five years and it is vital that individuals consider how this can be used to support their retirement.
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Using a later life lending product, such as equity release, to access the money held in property assets could add the equivalent of five additional years of retirement income when used in tandem with a drawdown customer’s existing pot.
Getting the right help
As more people start to see products like equity release as a solution to funding their retirement income, we’ll need to provide nuanced advice to better anticipate the varied circumstances of a wider pool of customers to support them in considering all of the options available to them.
We also need to recognise that equity release is a lifetime product, and advice needs to reflect a customer’s possible changing circumstances over time.
Since L&G Home Finance was founded 10 years ago, it has helped more than 100,000 customers release more than £6.5bn of equity. During this time, we have seen lifetime mortgages expand further into the mainstream lending market and the product features across the market evolve significantly to provide flexibility for customers.
Should a customer’s relationship circumstances change, they can add or remove a partner from a policy.
Similarly, should they want a friend or family member to speak with a provider about their policy on their behalf, that’s perfectly possible. For instance, where customers need more support with financial and medical decisions as they get older, options exist to establish a Power of Attorney who can support them to make those decisions as it relates to their lifetime mortgage.
Complementing later life mortgage advice
While handling the nuances of later life can seem overwhelming for customers, they are often unaware of the breadth and depth of support available beyond what might be expected.
For example, L&G’s Your Lifetime Mortgage Guide is a new resource we’re sharing with all existing customers, offering accessible information and signposting support for their long-term and changing needs.
As later life lending becomes increasingly mainstream, it’s important for the industry to highlight that we’re here to support customers for the long term.
Whether through guides, dedicated support services or beyond, for later life lenders, creating a rewarding retirement isn’t just about releasing property wealth, it’s about holistically supporting customers when they need it most.
