SCOTTISH homeowners benefitted from an £86million boost to their pension finances in 2016. And it’s all thanks to property wealth.
New analysis from over-55s finance specialist Key Retirement revealed that retired Scots used equity release plans to free up an average of £55,200 from the money tied up in their homes – providing them with the opportunity to pay off debts, help out friends and family, and also travel more.
Equity release is available to those aged between 55 and 95, who own a property worth at least £60,000.
Plans enable homeowners to release a tax-free cash lump sum from the value built up in their property over the years, with the amount available varying depending on factors such as age and current market value.
Key Retirement’s data also showed that nearly 1600 retirees use their homes to help fund retirement last year, with homes used for equity release valued at an average of £190,800.
The average equity release customer in Scotland was aged 71.
The majority of homeowners released property wealth as a way to pay for home improvements, with 49 per cent using some or all of the money to in invest in their property. Around 34 per cent of pensioners used the money to clear debts on credit cards and loans, including mortgages, while a further 16 per cent used their cash to pay for holidays.
Dean Mirfin, technical director at Key Retirement, believes the trend for releasing equity indicates that homeowners regard their property as a way to supplement their finances in later life.
He explained: “Property wealth is making a huge contribution to retirement planning and that is demonstrated by the wide range of issues Scottish pensioners can tackle.
“It is interesting that retired Scots are more likely to help out family than spend money on a holiday but that is partly because they are able to release more than £55,000 and their money is able to go further.
“The biggest use of property wealth is to pay for home and garden improvements and it remains the case that many Scottish pensioners need to clear debts.”
He added: “Equity release is a real alternative for pensioners who are seeing traditional retirement income solutions squeezed by historically low interest rates.”
This article is brought to you in association with Key Retirement.
For your FREE guide to releasing cash from your home call FREE on 0808 208 2362 or visit www.keyretirement.co.uk/dailyrecord
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