Could Equity Release Schemes Help People Retire Early?


With talk of state pension deficits and growing concerns that people are going to have to work longer in order to survive, could an equity release scheme help homeowners enjoy their golden years properly?

Equity release schemes have the potential to unlock a tax-free lump sum from the value of a property to be spent on whatever they need the money for.

In recent times of recession, homeowners have been considering this option to help them enjoy their retirement. However, other options include using the equity for a one-off luxury purchase, helping the children out (particularly getting them on the property ladder) and going on holiday.

So how can equity release help homeowners to retire early?

People Are Worried about Making Ends Meet

Of course, this won't be an option available to everyone but with greater weight being placed on achieving the right work/relaxation balance in modern times, using the equity in the home could help many people do this. Terri Bodell, a Stress Doctor who works in life skills development has highlighted a need for people to separate work and relaxation.

She said:"Everyone's quite strapped for cash. They're still worried about how to make ends meet, how to pay their bills and mortgage.

"There's not a lot of spare cash around. As a result, with work issues and the fact that we're still not fully out of the recession, there is still the concern of redundancy."

By taking advantage of an equity release scheme and unlocking a lump sum from the value of a home, some people could achieve this balance.

Improving Quality of Life

The money released through an equity release scheme could help to supplement any pension, giving people more freedom to start relaxing. In some cases this might tempt people to consider early retirement from work or maybe just strip back the amount of time spent working.

The additional stress that comes with working extra hours, something many people face, can have a major impact on quality of life.
So, whilst this might not be suitable for everyone, those with a good enough pension might consider releasing equity in order to enjoy an earlier retirement or certainly to reduce the amount of time spent at work.

• Equity release could affect your current or future entitlement to means-tested benefits
• Releasing equity to spend in your lifetime can reduce the amount that is left in your estate when you pass away
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