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In the UK it’s called equity release and it’s becoming a more popular way to free up retirement income.
Stats from the UK show that this type of strategy is on the rise, with more Britons accessing the equity in their homes to pay for retirement-related expenses, usually when they don’t have adequate retirement income from other sources.
Is it the right approach for homeowners lacking that adequate retirement income, asks Sophia Imeson for Pensions Expert.
“Opting for equity release to make ends meet once one’s working days are over is a particularly moot point. The Money Advice Service points out that opting for equity release means people might not be able to rely on their property for money they need later in retirement, and there are also costs involved,” she writes.
Britons can access the “cash tied up in their home if they are over the age of 55,” continues Imeson. The program’s popularity is increasing, with more than 8,000 equity release plans approved in the second quarter of the year.
With a lack of occupational pensions to pay the retirement bills and people living longer, “is releasing equity from property likely to be the only answer for some people?” she asks.
More: Lack of savings and/or pension means a “gap to fill at retirement.”

ARIA provides a forum for an informed discussion on retirement income adequacy, and other related issues, including pension and retirement coverage, and defined benefit pension plans – ARIA pensions blog, 12 Dunlop Street, Barrie, ON, L4N 1V6 – sitemanager@ariapensions.ca

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