Looking for extra money for retirement?

Perhaps you are looking to supplement your retirement income, perhaps because of the cost-of-living crisis, perhaps because you think that you are feeling fitter than ever, or even that the reality that, like many older Britons you have not saved enough to see yourself through your senior years.

Whatever the case, increasing numbers of retirees are looking at options such as equity release to increase their retirement income and ensure a comfortable, financially secure retirement.

Some facts behind the reason behind the growing interest:

• Increased life expectancy in the UK means people are spending more years in retirement. This is resulting in extra funds to maintain their quality of life: In the mid-1970's, people only need budget for 10 to 15 years of retirement; today, it`s more likely you may need to plan for 30+ years.
• The erosion of traditional workplace retirement provision has led to a greater reliance on personal savings and investments. These may turn out to be insufficient for retirement: Some estimates suggest you will need to have saved between half and two-thirds of what you earned in your lifetime after tax to retire in relative comfort. 
• It's things like inflation, low interest rates, and unpredictable economic conditions impacting on the value of pensions, which make it challenging to generate an adequate income in retirement.

In what way can equity release be used to supplement your retirement income?

Equity Release can be used to supplement your retirement income. It can do so by obtaining tax-free cash from your home in different ways. As such, it can provide financial security in a flexible manner in retirement, assisting you maintain your standard of living or help pay for new adventures.

A few matters you may want to consider:

• Use your equity release funds to provide a means of accessing additional funds, as and when you need your existing pension income to stretch that bit further.
• Use your equity release funds to purchase a buy-to-let property, thereby allowing you to generate an income.
• You may still be working and don`t want to stop, but you could use your equity release as start-up capital for your own small business.

In summary.

It is important to note that equity release can be a very helpful way to supplement your pension if your existing retirement income is falling short of meeting your outgoings, particularly so in the form of a drawdown lifetime mortgage. This being so as it allows you to access funds gradually and help you to manage your finances more effectively.

With a drawdown lifetime option, you receive an initial tax-free lump sum while the remaining funds are held back in reserve. You only incur interest on the money withdrawn. This keeps down the long-term cost of borrowing. Many plans offer flexible withdrawals, with a number offering transactions starting from as little as £2,000. Of course, terms vary by provider.

Before proceeding it’s important to consider how this strategy aligns with your overall retirement goals and seek professional financial advice to explore the best options for your needs. Your Dentons Adviser can help you work out the right option for your personal circumstances.

Although every effort has been made to ensure that the information provided in this article is accurate and correct, the information provided does not constitute any form of financial advice. We recommend that you take financial advice before making any financial decisions.