With the cost of living soaring as food and energy prices increase, and inflation driving mortgage interest rates higher, the current economic outlook is challenging for many people.
Therefore, it is perhaps no surprise that our wealth and wellbeing research [i] shows that of those surveyed who would consider a lifetime mortgage in the future, almost a third (31%), would be more likely to do this because of the current economic conditions.
Notably, interest in lifetime mortgages was highest amongst younger age groups, parents of young children and high-income households, which could be viewed as a shift in attitude towards using lifetime mortgages as a more mainstream retirement funding solution.
As many look to the future of their retirement, the option of equity release provides reassurance that property wealth could offer another avenue of income, particularly as the current level of pension savings may not ultimately provide sufficient income for the retirement people are hoping for.
For example, unbiased.co.uk [ii] suggests that workers should save 12.5% of their salary for a ‘good’ pension. However, the IFS state that 60% of middle-earning private sector employees who are contributing to a pension are saving less than 8% of their earnings [iii].
But a lack of pension savings for a desirable later life lifestyle is not a new phenomenon, as our wealth and wellbeing data showed that 44% of current retirees wish they’d saved more into their pension.
So, as many struggle to adequately prepare through traditional means for the comfortable retirement they aspire to, a lifetime mortgage can be seen as growing in appeal as a valuable part of the overall solution to fund a comfortable retirement.
To help your clients achieve their later life financial goals, we offer two types of lifetime mortgages; Lump Sump+ and Drawdown+.
We put customers at the heart of our lifetime mortgage product design, which is why our products include:
- Downsize protection from year 5 onwards.
- The ability to port a lifetime mortgage to another property (T&Cs apply).
- Fixed early repayment charges ending after 10 years, regardless of when any withdrawals are made.
- Access to LV= Doctor Services and Care Navigator.
If you’d like to know more about our lifetime mortgages, speak to your equity release account manager:
Call: 0800 028 8974 (option 1)
LV= Doctor Services is a confidential service powered by Square Health and medical data will not be shared with LV=.
LV= Doctor Services, and the services available through Care Navigator are provided by third party companies. These services are not regulated by the Financial Conduct Authority or the Prudential Regulation Authority.
LV= Doctor Services and Care Navigator are non-contractual benefits and can be changed or removed at any time.
[i] Wealth and Wellbeing Research programme, Edition 12 (https://www.lvadviser.com/service/documentlibrary/get/a80cc078-1312-4500-9b62-45991e3619b5/wealth-and-wellbeing-ed-12.pdf)
[ii] Nick Green, How much should I pay into my pension, Unbiased.co.uk , 7 June 2023 (https://www.unbiased.co.uk/discover/pensions-retirement/managing-a-pension/paying-into-your-pension)
[iii] Jonathan Cribb, et al, Major new pensions review warns of substantial risks to finances of future generations of pensioners, IFS.org, 20 April 2023 (https://ifs.org.uk/news/major-new-pensions-review-warns-substantial-risks-finances-future-generations-pensioners)
For UK Financial Advisers only.