A recent survey by Norwich Union has found that most lifetime mortgage customers are using their equity for home improvements. Around 77% are using the money for renovations to their homes, 34% use the money for holidays, and 31% are using the money to boost their income in retirement. Eight per cent said that they will use the money for healthcare, a further 4% will use the money for inheritance tax planning, and the smallest proportion (1%) intends to fund property abroad.
Another study from Prudential, has found that 42% of pensioners said that they would need an increase in income to live a comfortable lifestyle. It found that 11% claimed to have to dip into assets intended for family or friends, 5% have borrowed money from banks, and 1% of pensioners have turned to crime.
Our view
It actually makes some form of financial sense to consider releasing equity from you home given that if you have too many assets and need care, the local authority may place a charge over your property to pay for your care.
Learn more in the Care Fees Adviser.com.
Learn more about lifetime mortgages.