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How equity release can help you prepare for the future

Richard Barrett

Director of Sales

Last updated 10th August 2023

3 min read

Some people choose to release equity to pay for one or two big spends, like a dream holiday, home renovations or family gifts. But many others use the money released to improve their quality of living throughout later life and retirement.

This article looks at the ways equity release can be used to prepare you for the future.

Paying off debt

Our recent study found that the average debt that someone over 50 still has is around £65,000 left to pay on a mortgage, £10,000 in personal loans, and £3,000 outstanding on credit cards. Unsurprisingly, of those who had paid off their debts, 85% said that doing so improved their overall happiness.

Whilst equity release is a loan in itself, it does not need to be repaid until you either die or move into long-term care (although some providers do allow you to make one-off or regular repayments to help reduce the total cost of borrowing). This means that by using equity release to pay off other loans or your mortgage, you no longer have to make any monthly repayments. So, you’re free to spend more of your regular income on enjoying your retirement.

It's worth noting that if you do release equity you will be required to fully pay off any outstanding mortgage.

Home adaptations

It’s no secret that as we age our mobility can start to reduce, but that shouldn’t be a reason to move out of a home you love. (Even if that tall staircase you used to adore has become more of an inconvenience than a feature of the home!)

Some people use equity release for home adaptations to make daily living easier. Installing a stairlift or a walk-in bath can be the difference between living comfortably at home or having to consider moving somewhere more accessible.

In-home care

In-home care is another way equity release can be used to improve your quality of life in retirement. Depending on your circumstances, this could mean as little as having someone pop round to clean up and make a meal or two.

Or, it could pay towards full-time care in the comfort of your own home, as an alternative to moving to a residential care facility.

Early retirement

For those still in work, early retirement is another possibility that equity release can unlock. Perhaps you feel ready to start winding down your responsibilities at work to spend more of your energy on your hobbies, or you’re looking for more free time to help care for grandchildren while they’re young.

Whatever the reason, equity release could help to tide you over financially until you reach state pension age.

Other ways to make the most of equity release

Everyone releases equity for a different reason, whether it's to prepare for the future, gift early inheritance, or to enrich later life with travel or home improvements – there’s really no right or wrong way to spend it. However, it’s a big financial decision and you should always seek independent financial advice before deciding whether it’s right for you and your life goals.

Remember, equity release isn’t right for everyone. It will reduce the value of your estate and the amount you’re able to leave as an inheritance when you die. It may also affect your tax position and your current and future entitlement to state benefits.

There are a number of alternatives to equity release which could better suit your individual circumstances.

Find out more:

The thoughts and opinions expressed in the page are those of the authors, intended to be informative, and do not necessarily reflect the official policy or position of SunLife. See our Terms of Use for more info.