The recent budget announcement will see the single state pension amount introduced and the age related allowance frozen which, according to Claire Barker, Chairman of ERSA, will see many receiving less money following retirement and could lead to an increase in equity release transactions.
“The announcement of the introduction of a single state pension amount and the freezing of the age related allowance will result in many older people receiving less money each year in retirement. As with any changes to pensions, they will come too soon for many people approaching retirement to do anything about it and to save enough money to mitigate its effects. However, many of those affected will be in the asset rich but cash poor baby boomer generation, meaning that equity release could provide them with the means to unlock the wealth from their home to make up any deficit in their retirement planning.
With this move and an OBR consultation on linking the retirement age to life expectancy expected in the summer, equity release advisers, solicitors and providers need to be ready to demonstrate the expert processes and advice that have gone such a long way to improving the reputation of the equity release industry and positioning it in the mainstream”.
Will the pension changes and age related allowance freeze be the start of an equity release boom?
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