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Effective retirement planning is a pressing issue – Pure Retirement

by: Paul Carter, CEO of Pure Retirement
  • 15/11/2017
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Effective retirement planning is a pressing issue – Pure Retirement
This year the demand for lifetime mortgages has risen by a third, leading to a record high Q3 lending of £824m. Almost 10,000 new plans have been agreed and the demand for lifetime mortgages is only set to increase.

The uncertainty of pensions and concerns for retirement income are encouraging homeowners to consider a wider range of financial options, and among these is equity release. Retirees living in valuable properties can still feel overwhelmed with everyday living costs and household bills.

For many their property is their largest asset and could be the answer to financial security for their retirement. In the UK alone, there is £1.8trn of equity tied up in the homes of those aged 55 or over, and lifetime mortgages could offer them the retirement that they so rightly deserve.

 

Retired too early

Figures from the Equity Release Council suggest those making defined contributions of 8% will retire with a pension of only 15% of their final salary. This is only one fifth of what they could have retired with under the previous defined benefit scheme.

Research conducted by SunLife highlights important factors for those who will be affected by this.

Its research suggests a staggering 85% believe they retired too early with a further 20% taking up another job after retiring. Most interestingly, the third main concern of those surveyed was the worry of not having enough money to live on once they retire.

With ongoing discussions of the triple lock and the state pension age set to increase seven years earlier than planned, it is no wonder that those trying to plan their retirement have uncertainty about their future.

People are now becoming increasingly aware of the value tied up in their homes and seeing this as an option for security in retirement.

 

Adviser training

A report from UK Finance acknowledged the progress of the lifetime mortgage sector, in particular the importance of new entrants to the market. As the demand from consumers increases it is inevitable that more advisers are needed for the growing market.

Therefore, it is extremely important that advisers new to the market are armed with the right tools and training in order to provide the best possible service to those choosing a lifetime mortgage.

A variety of events and resources to support advisers are available, including Pure’s own online portal, webinars and events, and those offered by others including Aviva, Just Retirement and the new AirSourcing toolkit from the Equity Release Club.

We believe that by making such educational resources freely available, advisers will be able to confidently understand and embrace the option of equity release with their clients.

With uncertainty around state pensions, financial security and the ever-increasing cost of living, a lifetime mortgage could be a potential solution for those seeking a comfortable retirement.

It is imperative that providers do all they can to ensure customers have a bank of knowledgeable professionals to help and guide them, supporting the important financial decisions of the next generation of retirees.

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