LV= Reports That Up To 1.2 Million Over-50s May Use Equity In Home To Supplement Pensions
Released on: October 12, 2010, 5:50 am
LV= has revealed that 'Home is Pension' is a common mantra
among the over-50s workforce in Britain as shown in a recent report
published by the retirement specialist. Although 54% of the over-50s
believe the value of their home has fallen over the last three years,
an estimated 1.2 million 'HIPpies' ('Home is Pension') may use the
equity in their home to help supplement their retirement income.
Only 19% of all over-50s still in work feel that they are financially on track to
retire as planned, while the number of working over-50s that believe they may have
to delay retirement for financial reasons has increased hugely, to 41% from just 28%
this time last year. Homeowners over 50 estimate they have lost £60 billion in
property value due to recent volatility in the housing market.
However, this has not put many off using the equity in their homes to help fund
retirement, with nearly a quarter of working over-50s considering using some, or all
of the equity in their home to fund their retirement. The 'Home is Pension' mantra
is so valuable to over-50s, that 54% would suggest their children include investment in property as part of
their retirement planning.
When working over-50s were questioned about the impact an interest rate rise would
have, LV='s research found that 40% would have to reduce their pension
contributions just to meet the higher cost of paying debts. More than four in ten
(44%) of all working over-50s and 34% of those aged 60-69 in work, have an
outstanding mortgage debt on their home.
Vanessa Owen, LV= Head of Equity Release, said: "It seems to
be increasingly commonplace for those approaching retirement to consider using the
equity in their property as part of their overall retirement plan. Continuing doom
and gloom over volatility in the housing market and seeing some properties fall in
value, hasn’t deterred the UK’s "HIPpies" and many are still positive that the
equity in their home is their best chance of having a more comfortable retirement."
Of those planning to use the equity in their home, nearly a quarter (22%) believe
this is now their best option because their pension savings won’t give them the
income they hoped it would, and 13% say it's all they have to rely on after the
state pension. Two-thirds (64%) of these said they had always planned to use their
property for their retirement: 52% by downsizing their home to release equity and
12% to borrow against their home through an equity release product.
Many over-50s are experiencing a 'double whammy', having seen large amounts wiped
off the value of their pensions and investments, whilst also being forced to reduce
the amount they are setting aside for retirement due to the pressures of living
costs during the recession.
Notes to editors
All research was conducted for LV= by Opinium Research in September 2010 amongst
more than 1,172 British adults aged over 50 and in employment.
LV= is a registered trademark of Liverpool Victoria Friendly Society Limited (LVFS)
and a trading style of the Liverpool Victoria group of companies.
LV= offer a range of insurance products including home insurance, car insurance, life
insurance, pet insurance and over 50 life insurance.
LV= employs around 4,000 people, serves over 3.8m customers and members, and manages
around £9.5bn on their behalf. We are also the UK's largest friendly society and a
leading mutual financial services provider.
LVFS is authorised and regulated by the Financial Services Authority, register
number 110035. LVFS is a member of the ABI, the AFM and ILAG. Registered address:
County Gates, Bournemouth BH1 2NF.
69 Park Lane
020 7634 4418
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