Welcome to the SunLife Equity Release report 2020
8 min read
We asked 1,010 homeowners aged between 50-80 to complete an online survey.
Our aim was to get an accurate picture of what the over 50s think about equity release.
Read on or download the full report to find out more about what’s important to people over 50 when it comes to their finances – and how equity release could help them.
1. Home ownership
What’s a typical over 50s home?
The Cost of Dying Report is a sector-leading research paper, providing a credible and complete view of funeral costs over time.
How many of us own our own home?
- 28% of people own their house with a mortgage
- 72% own it without a mortgage
What kind of houses do we own?
The most common house types among the over 50s are:
- 32% – Semi-Detached homes
- 25% – Detached homes
- 23% – Terraced homes
THREE – The average number of bedrooms per house
How much is there left to pay?
- £58,669 – The average amount left to pay on the mortgage
- 54 years – The average age that the mortgage is paid off
On average, people over 50 have lived in their home for 20 years.
What are our homes worth?
£113,365 – The average amount people paid for their home
£240,681 – The reported average value of their home now
How do the over 50s feel about their home?
- 53% of people love their home and can’t see themselves moving
- 28% are considering downsizing or moving in future
- 12% say they’d like to move but can’t afford to
For those who love their home, their top three reasons for wanting to stay put are:
- A love for the area they live in – 64%
- Their home is close to local amenities – 45%
- Their home is close to friends and family – 40%
The cost of moving also puts people off – 26% for financial reasons, and 30% because of stress.
2. Personal finances
£4,417 represents the mean average of the cost of a burial and the cost of a cremation in the UK.
These basic funeral costs include the funeral directors’ fees (£2,687), doctors’ fees (£164), clergy/officiate fees (£169) and the burial or cremation fees:
How do the over 50s feel about their finances?
- 43% said they’re about where they expected to be financially
- 32% said they’re better off than they expected to be
- 25% said they’re worse off than they expected
59% of over 50s say they have enough money for their retirement. But 59% also say they’ll run out of money before they die.
How much money do the over 50s need?
£205,000 – The average amount people said they’d need to live comfortably to the end of their lives.
How people consider getting extra cash in retirement:
- 32% – Downsizing
- 16% – Coming out of retirement
- 11% – Retiring later
- 10% – Taking out an equity release plan
What would the over 50s spend their money on?
We asked people what they’d do if they were given a lump sum of £100,000. The top three answers were:
- 38% – Going on holiday
- 36% – DIY/home improvements
- 33% – Giving their children/grandchildren/other family members a cash gift
But when it comes to top priorities, they’d use the lump sum for:
- 13% – Going on holiday
- 16% – DIY/home improvements
- 14% – Clearing their mortgage
- 14% – extra income/boosting their income/pension
Do the over 50s have enough space?
- 53% of people with children wait between 6 months and 5 years to redecorate their children’s bedrooms
- 13% haven’t redecorated their children’s old bedrooms since they left home
- 22% of homeowners with children still have the kids living at home
What do people do with their kid’s bedroom once they’ve flown the nest?
- 51% – Guest bedroom
- 22% – Leave as it is
- 18% – Grandchildren’s playroom
- 16% – Study
3. Equity release
What do the over 50s think about equity release?
- 71% said they’d never consider Equity Release
- 27% said they’d consider it or already are
- 3% are already on board with an ER plan
Why are the over 50s considering equity release?
- 55% – Extra income/boosting their income/pension
- 32% – DIY/home improvements
- 28% – Supplementing their pension
- 27% – Going on holiday
- 24% – Supplementing their income
35% of people considering equity release say extra income/boosting their income/pension is their top priority.
What are the over 50s using their equity release for?
Among those who’ve already taken out an equity release plan:
- The average amount of money released – £46,928
- The average percentage of equity unlocked – 23% of the property’s value
The top five reasons people chose to take out equity release were:
- 60% – DIY/home improvements
- 41% – Extra income/boosting their income/pension
- 22% – Buying a car
- 21% – Clearing other debts
- 18% – Supplementing pension
34% of people with an equity release plan say DIY/home improvements is their top priority, followed by extra income/boosting their income/pension at 31%.
Do the over 50s know about equity release?
- 90% say they understand equity release a little
- 23% say they understand equity release completely
- 1% haven’t heard of equity release
Among those who said they wouldn’t consider equity release, when it’s explained to them, 15% said they’d now consider it.
We asked people what they think happens when you take out equity release…
- 32% think you risk losing your home – which isn’t the case
- 67% know you can still leave an inheritance
- 94% know you can stay in your home
- 46% aren’t sure if you can move house, while 41% think you can
- 48% know the cash lump sum you release is tax-free, but 42% didn’t know this
- 26% think their children will have to pay the equity release debt – which isn’t the case
- 45% aren’t sure if they can release equity from a home with a mortgage, but 38% know you can
With 90% of the over 50s still unsure about how it all works, there’s more we could be doing to let people know the ins-and-outs of equity release.
Especially as a quarter of over 50s also think equity release will leave their children in debt, and over a third think you risk losing your home. Misconceptions such as these could be preventing thousands of people from getting money when they need it most.
Of course, equity release isn’t for everyone. But it’s important that, where possible, people are given the chance to have the retirement they deserve. And equity release could be the solution for many.
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At SunLife, we've been tracking funeral costs for 15 years, so we have historical data from 2004 onwards. If you require any past reports, please get in touch with our media contact.Download the full PDF report