Equity release can enable homeowners to remain in their forever home and fund their retirement, but independent advice is essential
More than 60% of over-55s are already settled in their forever home, according to Canada Life, which equates to around 6.2 million households.
A desire to stay in their own home, along with spiralling care costs and emerging socio-economic factors such as children returning home, has led some forever homeowners to consider their financial options in order to stay longer in their home, according to research by the financial firm.
What is a forever home?
The key characteristics of a forever home, according to those living in one, include having a large garden (38%), access to off-road parking (35%), a large kitchen (35%) and being detached (35%).
Having en-suite bathrooms (33%) and a garage (31%) are also listed as the key things that homeowners look for, as well as being close to shops and restaurants (28%), being in the countryside (23%) having a study (24%) or a ‘hobby room’ (18%) and being close to children (14%).
However, for most, a forever home is more than something physical. Half (49%) of over 55s say it gives them comfort, 37% feel like a home is their forever home when they’ve made improvements so that it’s the way they want it to be, and for 28%, the most important factor is making memories in the house.
Ways to stay
One in five (19%) homeowners would consider working into retirement if it meant they could afford to stay in their forever home, according to the research.
Another 13% would consider borrowing money from the bank and 11% would consider releasing equity from their property. One in 10 (9%) would move family members into their home, and another 9% would be willing to rent out their spare room if it meant they could stay in their forever home.
Alice Watson, head of marketing, insurance at Canada Life said: “As the shape of retirement continues to evolve, some retirees may find themselves unable to stay in their forever homes. They could consider downsizing to fund life after retirement, support family members, or pay for care.
“However, retirement funding options are also evolving and leaving a forever home does not have to be the first port of call to access income in retirement. Some people recognise that working longer could be the answer, but another option that could be considered is equity release. It presents homeowners with the possibility of staying in their forever home, releasing a proportion of the equity they have built up to support their lifestyle.”
Original article www.yourmortgage.co.uk