Later life borrowing is becoming more acceptable amongst the over 50s as a common way to manage money in retirement.
Property wealth is important to retirees, with more than half factoring property in to their financial plans during later life.
Property accounts for 40p in every £1 of wealth for the over 65s and 47p in the £1 for the over 75s, says data in a report from trade body the Equity Release Council.
The study goes on to explain that 51 per cent of homeowners aged over 45 years old regard cash invested in property as part of their later life financial plans.
Borrowing against property is seen as a good way to manage money in retirement by 44 per cent and 40 per cent see equity release as part of the reality of growing older.
The money is earmarked for helping family or as a ‘rainy day fund’ for unexpected expenses.
The report also notes that those approaching retirement – aged 45 to 64 years old – are less likely to want to leave property for others to inherit when they die. Instead they wish to benefit from the value of their property during their own lifetime.
Equity Release Council chair David Burrowes said:“The UK’s ageing population and changing retirement landscape means people are increasingly thinking of property as a multi-purpose financial asset – particularly those aged 45 to 64, the retirees of tomorrow. Property is often a person’s single largest asset and makes a significant contribution to homeowners’ personal finances as well as providing a place to live.
“Changing attitudes to property are significant given the financial challenges facing our ageing population as they seek to live longer, healthier lives. Many people have made inadequate provision for their retirement and care needs, while others have younger family to support. Consequently, bricks and mortar have become a vital piece of the retirement funding jigsaw, to benefit people during their lifetime as well as their families.”