How Will You Enjoy Your Retirement?
From sensible ways to reduce your monthly outgoings to once-in-a-lifetime travel plans, here are some popular ways to spend your equity release funds.
If you’re considering an equity release plan as you approach retirement age, then one of your deliberations may be regarding how you intend to spend your money. The simple answer is that equity release plans are incredibly flexible and allow you to access and then use the cash in whatever way you please. In terms of receiving the money you’ve built up in your property, you can select to receive this as a one-off lump sum payment, or else set up a drawdown fund to release smaller payments on a regular basis. To give you an idea of how your equity could be of value to you in your later years, here are some of the top ways you might choose to use the money.
Lockdown has given UK homeowners plenty of opportunity to sit back in the comfort of their homes and consider how they’d like to improve their living space. Some retirees might choose to add an extension to the home to create a more luxurious kitchen diner space. Others may be more interested in doing up the garden with a view to spending plenty more time out there.
Helping Out Family Members
Young people have long been struggling with finances, from rising tuition fees, record high rental costs and of course the challenges of getting on the housing ladder. If you’d like to support your children or grandchildren, then equity release advisers can help you narrow down the perfect option for you. It’s not always necessary to release all of the equity you’ve accumulated in your home, which is why it’s important to explore your individual circumstances.
If you haven’t saved for a pension, or if your pension plan hasn’t performed as well as expected, then you may have difficulty maintaining a comfortable lifestyle. The full state pension amount is £175.20 per week depending on your National Insurance record. If you would struggle to live off this amount, then equity release can top-up your monthly income so you can afford to continue with the lifestyle you’ve been accustomed to.
Who hasn’t dreamed of travelling the world during retirement? Whether you’re interested in taking a cruise or buying a round-the-world ticket, a cash injection of equity could help you to book those plans. The beauty of travelling in your later years is that you’re not restricted by your employer’s holiday allowance or the need to schedule your holiday plans around your colleagues. You could even take an extended trip and make the most of the experience!
Clearing Your Debts
This is perhaps the most mundane option on the list, but nevertheless it’s essential to consider the impact of your outstanding debts on your financial position during retirement. If you still have a mortgage sum to pay, or other loans and credit card debts, then you’ll be paying interest on them each month. By releasing some equity to clear these debts, you could reduce your monthly outgoings, providing you with more income to live off each month.
Remember that an equity release plan which comes with a SHIP or Equity Release guarantee will always provide you with the right to remain in your home for life. For further information, contact the Equity Release Council.