Up and down the country, many over 50′s are having to consider equity release as a consequence of forced redundancy from work. Key Retirement Solutions, who provide equity release have said that they have seen an increase in the number of enquiries from those who have recently been made redundant. Dean Mirfin from the company told the FTAdviser website that… “…people in their 50s should ideally be gearing up for the final push on securing their finances in retirement. However we have seen a growing trend in customers of younger ages applying for equity release in order to supplement incomes at a time when many can ill afford any drop in income, let alone the dramatic effects of redundancy.”
Traditionally equity release has been regarded as a product that can provide an income for those who are retired, often in their 60′s or 70′s. However, according to a recent survey, around 25% of equity release plans taken out in Q1 were from people aged under 65. Aviva’s latest real retirement report would help explain why there has been such as increase in younger people looking for equity release as a means of providing an income. They report that 39% of over 55′s have experienced.”…unwanted and unplanned, changes to their careers in the 10 years between their 55th and 65th birthdays.” Of these 15% have been made redundant, 11% had to stop work due to illness and 11% were forced into early retirement.
Due to the recession and a high number of recent graduates, the jobs market is extremely challenging in itself, and some would argue this is more so for the over 50′s. The problem is compounded by the fact that those who can hold onto their jobs are now often working past the traditional retirement age of 65. If this wasn’t enough, inflation is also eating into people’s real spending power. So-called ‘grey inflation’ which describes inflation for those who spend disproportionality more of their income on essentials such as food, energy and petrol, is also running at 4.7%.