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Equity Release and Retirement Planning Explained

Money Savings Advice Equity Release Retirement planning

People are living longer – life expectancy is constantly rising, and as of 2020 stands at 79.3 years for men and 82.9 years for women. And that means it’s more important than ever to properly plan for your retirement years.

If you own your home, equity release could be one option of improving your financial stability as you make your budget for once you’ve stopped working. Our guide takes you through the options available.

Can Equity Release Help With Retirement Planning?

Equity release schemes can unlock either a cash lump sum or monthly payments to help you plan for retirement. There are no limitations on how you use the money, so it can be used for debts or living costs.

When planning your retirement, equity release can be a useful way of generating extra income or financial support, either through a lump sum or regular payments.

Continue reading to get the full equity release and retirement planning details.

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Equity Release: Retirement Planning – Financial Security

Equity release is becoming more popular due to lower interest rates, and it can be a good idea if you need extra money to keep you secure once you’ve retired. The state pension age is increasing, due to reach 68 by the year 2028 and constantly under review. So you need to make sure that when you do decide to retire, you’ve enough money to get by.

If you choose to release equity from your home, you can do it in three ways.


According to the Equity Release Council 37,000+ people used Equity Release schemes in 2018, releasing over £3.06bn from their properties.

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Equity Release: Lifetime Mortgage

A lifetime mortgage will set you up with a cash lump sum, and you’ll keep your home. You won’t make repayments until you’ve gone into full-time care or you’ve passed away, and you can then use this lump sum to pay off debts, or towards a new income stream such as a second home for renovation or rental.

Equity Release: Drawdown Lifetime Mortgage

You could also choose a drawdown lifetime mortgage. This works in much the same way but, rather than being given the lump sum, it’s essentially a credit allowance that you can draw money from as and when you need it. The benefit of this is that you’ll only owe interest on what you’ve borrowed, rather than the whole amount, which protects more of your estate in future.



Equity Release: Home Reversion

Finally, if you’re over 60 you could instead choose home reversion. Here you’ll sell your home but retain the right to live in it. Again, you could take a cash lump sum, although some reversion plans will instead offer regular payments. If having these regular payments into your account would make it easier for you to budget, then this may be a favourable option for you.

Equity Release: Retirement Planning – Hobbies and Holidays

It’s worth remembering that retirement planning isn’t always about financial security. You may be in a healthy financial position with a pension (see the government pension guide) that has set you up for retirement. That’s when you might want to consider equity release to fulfil a life’s dream, whether that’s a new hobby that requires an initial investment, or a holiday home where you can regularly relax.

Whatever your circumstances, equity release loans could help you fulfil your retirement plans and ensure you have financial security or the means to really enjoy your retirement years.

Quick Equity Release FAQs


Home reversion plans are, in essence, a means of selling a share in your property to an investor, in exchange for payment. There are no repayments, with the investor receiving their share of proceeds when the property is eventually sold.

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The Equity Release Council is the industry body which represents equity release providers, qualified financial advisers, solicitors and intermediaries. Equity release is a growing sector, especially for older homeowners who may have limited access to finance.

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You need to be at least 55 years old to apply for equity release in the UK. If you are planning to make a joint application, this applies to both of you.

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Equity release drawdown works by giving you the value of your loan as a pot that you can make withdrawals from. You’ll only pay interest on the money you decide to withdraw.

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Equity Release enables you to release cash from your property. There are two option, a drawdown lifetime mortgage is allowing you to release the money monthly or a Lifetime mortgage Lump Sum which pays the released cash in one payment to your account.

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How Can Money Savings Advice Help You With Releasing Equity?

Here at Money Savings Advice, we have partnered with some of the UK’s leading Equity Release brokers. They have already helped thousands of people get the best Equity Release deal and they can do the same for you.

Choosing an independent adviser means they won’t recommend a scheme unless they are sure it is in your best interests. Their advice is also regulated by the FCA, which gives you an additional layer of protection.

If you would like to speak to one of these brokers who can provide you with a ‘whole market quote’ then click on the below and answer the very simple questions.

Len Burgess

Len Burgess is a professional financial writer who over the last five years has written hundreds of articles for all financial sectors. Len founded Money Savings Advice with the aim of helping consumers navigate their way around the financial world by providing easy to understand financial information and matching consumers with the best financial advisor based on their personal information.

Len Burgess

Len Burgess is a professional financial writer who over the last five years has written hundreds of articles for all financial sectors. Len founded Money Savings Advice with the aim of helping consumers navigate their way around the financial world by providing easy to understand financial information and matching consumers with the best financial advisor based on their personal information.

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