Only 1 in 10 say equity in the home should be for children to inherit
One third of Saga Equity Release Service customers use equity to enhance their retirement
Retirees in the South have 42% more equity in their homes than those in the north
Research by Saga's Equity Release Service* has revealed that the new generation of retirees are bucking tradition and believe their children do not automatically have a right to inheritance. Only 1 in 10 (12%) say they disagree with equity release products because they believe the home should be for children to inherit.
Over 50s will have thousands of pounds of equity tied up in their homes when they retire. The study, carried out through the Saga Populus survey revealed that a quarter (25%) of these are looking to use this to enhance the quality of their retirement regardless of any expectations of an inheritance from younger relatives.
National figures** show that 62% of over 50s own their own home and the Saga Populus survey revealed that by the age of 60 a large proportion (79%) of them will have already paid off their mortgage increasing to 99% when they reach 70. This means that they potentially have up to 56,000*** to spend on improving their life in retirement. However, figures suggest that there will be a real North and South divide among retirees when it comes to the ability to splash out in retirement. Householders in the South could have the potential to live it up more or preserve more for children to inherit primarily as a result of the average house price being 42% higher (67,544) in the South compared to the North.
The research also showed the changing views of the over 50s towards releasing equity from their home. One third (36%) of respondents aged 50 – 54 said they would consider releasing equity from their home to travel around the world compared to 18% of the over 65s – half the number of the younger generation. Also only 53% of 50 – 54 years olds said they would discuss withdrawing money from their property with their family compared to 71% of 65 .
Saga's research reflects the experience of the Saga Equity Release Service, which suggests that people are not just thinking about using the value in the house to enjoy retirement; they are actually following it through. Recent figures based on actual Saga Equity Release completions show that 28% of those who have released equity from their home did so to use the money to enhance their retirement, for example, purchasing new cars and exotic holidays; compared to just 12% that released equity from their home to give it to their family as a pre-inheritance.
Andrew Goodsell, Chief Executive of SAGA Group, commented
"We have seen an increasing amount of customers use the equity from their home to fund retirement. We have even had a customer recently who released money from their home to pay for their golf club membership!"
Homeowners can access a free guide, 'Affording the Life You Would Like in Retirement' or use the online calculator to show the maximum amount they could potentially release from their property by visiting http://www.saga.co.uk/equityrelease. Alternatively you can speak to a Saga Equity Release Adviser by calling 0800 015 6256.
*Research by Saga/Populus poll – conducted between 13th and 25th March 2008, 11,527 respondents.
**GB TGI 2008 Q1 (October 2006 – September 2007)
***Based on a 70 year old releasing the recommended 28% of the value of the property.
Advice service is available for people aged 60 and over
A cash lump sum and/or income from an equity release scheme may reduce the consumer's state benefits.
An equity release scheme will reduce the value of the consumer's estate.
The Saga Equity Release Service is provided by Just Retirement Solutions.
Benefits of the Saga Equity Release Service
Yes Only provide advice on those equity release solutions that include a no negative equity guarantee.
Yes Free initial consultation.
Yes A choice of face to face or telephone based service.
Yes Support you through every step of the process.
Yes Consider your circumstances and aspirations.
Yes Review your whole situation thoroughly, including any benefits or grants you may be eligible for.
Yes Offer a wide variety of equity release products from leading providers.
For further press information please contact the Saga Press Office on: 01303 771529.