There’s undoubtedly something of a pensions’ crisis in the UK, with the average retirement age on these shores continuing to inch higher as state resources are exhausted.

According to the latest estimates, the pension age will most likely reach 67 for both men and women by the year 2028, while this is projected to increase further in the future. In fact, it could breach the 70 mark over time, creating a scenario where people are required to work considerably longer than ever before.

In this post, we’ll look at how this is impacting on the equity release market, while asking why retirees are becoming increasingly anxious about their long-term financial futures.

The Latest Figures From the Equity Release Market

While the equity release market has largely rebounded from the coronavirus pandemic of late, returning similar results in 2020 as they did during the previous 12 months.

More specifically, the market had largely returned to normal trading conditions by Q3, with an estimated £884 million released during this period. This was a huge increase on Q2 figures, which saw just £521 million released as the coronavirus pandemic began to bite.

However, it’s interesting to note that the UK’s leading equity release advisor revealed a decline in the number of customers who were active in the market, with this having declined by 9% year-on-year.

The reason for this was simple; as clients began to eschew investment options in the light of the ongoing pandemic and the impact of national lockdowns in favour or covering essential spending such as debt repayment and wider family support.

Beyond the Numbers - Why the Market Betrays the Growing Anxiety of Homeowners

If you’ve ever wanted to release equity from your house, the main motivation for this will probably have been a desire to seek out viable investment opportunities.

However, homeowners have recently focused on spending their equity release as a way of driving fundamental financial security, with 47% of the £415 million withdrawn being committed to debt repayment.

Similarly, an estimated 25% (£221 million) of all funds was used to support family and friends in the near-term, in order to secure fiscal security for others who are of working age and may be struggling to cope with the impact of coronavirus.

Clearly, homeowners are increasingly inclined to spend their equity release funds on safeguarding their finances and reducing outgoings, while also protecting the financial resources of their loved ones.

This betrays the anxious nature of homeowners in the modern age, with the over 55s in particular concerned given the ongoing pensions’ crisis in the UK and the long-term socio-economic impact of the coronavirus.

This trend is likely to continue throughout 2021, even in the light of the global vaccine rollout and the projections for a marked economic improvement throughout the world over the course of the next 12 months.

Ceri Wheeldon

Ceri is Founder and Editor of Fabafterfifty.co.uk She is a frequent speaker at events and in the media on topics related to women over 50 , including style and living agelessly. With 20+ years experience as a headhunter Ceri also now helps support those looking to extend their working lives.

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