Retirees Face Tough Choices - To Equity Release or not?

More Retirees Consider Taking Equity Release To Supplement Retirement Income – A UK Care Guide Survey

The UK Care Guide undertook a survey to gather statistics on the attitude retirees had to using equity release to supplement their income.  The results were surprising.

Survey Insights

  1. 40% of people would consider taking equity release to supplement their pension, highlighting that many people are expecting a shortfall in their pension pot.
  2. 51% of respondents would like their employers to discuss equity release with them, indicating a gap in employer-provided retirement planning information. This suggests better employer/employee communication on financial readiness for retirement is needed.
  3. Only 7% of respondents have discussed equity release as a retirement option with their employers, further emphasising the need for more comprehensive retirement planning support in the workplace.
  4. 41% of people are not confident in their current retirement savings plan, highlighting an opportunity for increased financial education and planning services to boost confidence in retirement readiness.
  5. 39% prefer to receive information about retirement planning from an independent financial advisor, suggesting that while alternative information sources are valuable, professional advice remains crucial to effective retirement planning.

In a recent survey conducted by the UK Care Guide, which involved 1,803 visitors aged over 55 to their website from 12 January to 9 March 2024, 40% of respondents said they were considering equity release to supplement their pension income.

Additionally, many respondents (51%) desired more information on equity release as a potential retirement option from their employers. Yet, only 7% have had detailed discussions about it in the workplace.

These findings suggest a communication gap in retirement planning discussions between employers and employees and a significant concern about the financial implications of equity release amidst high interest rates. 

The survey also highlighted a need for more confidence among respondents in their current retirement plans, with 48% only somewhat confident in their financial readiness for retirement.

39% of respondents indicated a preference for receiving retirement planning information from independent financial advisors.

This indicates the importance of accessible, professional advice in dealing with the complex landscape of retirement financing. It also underscores the need for enhanced financial education and advisory services to help individuals make informed decisions about their retirement.

Saq Hussain, Director of the UK Care Guide, commented on the survey findings, “The results reveal a crucial need for better engagement and education around retirement financing options, including equity release.

It’s evident that economic changes and rising interest rates are causing uncertainty among those planning for retirement.” 

Hussain added, “While the preference for traditional pensions remains strong, equity release should not be dismissed outright. It’s about making informed choices.

We advise individuals to seek professional guidance to explore all available options to secure their financial future in retirement.”

Survey Questions

Here is a list of the questions and answers received for this survey.

1 – How familiar are you with equity release as a retirement funding option?

   – Very familiar – 12%

   – Somewhat familiar – 38%

   – Heard of it, but not details – 37%

   – Never heard of it before – 13%

2 – What is your biggest concern about using equity release for retirement?

   – Interest rates – 42%

   – Losing homeownership – 29%

   – Not leaving an inheritance – 19%

   – Other – 10%

3 – Have your employers discussed equity release with you as part of retirement planning?

   – Yes, in detail – 7%

   – Yes, but only briefly – 23%

   – No, but I wish they would – 51%

   – No, and I don’t want them to – 19%

4 – Would you consider using equity release to supplement your pension?

   – Definitely yes – 9%

   – Probably yes – 31%

   – Probably not – 45%

   – Definitely not – 15%

5 – How important is leaving an inheritance to you when considering retirement financing options?

   – Very important – 33%

   – Somewhat important – 41%

   – Not very important – 18%

   – Not important at all – 8%

6 – What information would you find most useful in deciding on equity release?

   – Detailed cost breakdowns – 29%

   – Long-term impact analysis – 36%

   – Personal stories from those who’ve done it – 22%

   – Legal and tax implications – 13%

7 – How do you prefer to receive information about retirement planning?

   – Employer workshops/seminars – 17%

   – Independent financial advisor – 39%

   – Online resources – 27%

   – Friends and family – 17%

8 – How confident are you in your current retirement savings plan?

   – Very confident – 11%

   – Somewhat confident – 48%

   – Not very confident – 32%

   – Not confident at all – 9%

9 – What’s more important to you, having a higher pension or taking equity release?

   – Higher pension – 53%

   – Taking equity release – 14%

   – Both equally – 18%

   – Unsure – 15%

10 – Are higher interest rates making you reconsider equity release as a retirement option?

    – Yes, significantly – 56%

    – Yes, but only slightly – 24%

    – No – 15%

    – I haven’t considered it yet – 5%

UK Care Guide is really proud to have been featured on some of the UK’s leading websites.

Meet the author

Saq Hussain

Saq is a financial expert and is responsible for the day-to-day running of the UK Care Guide website. Before taking on the operation of this site, Saq was a Director and the UK Head of DC Pensions, Benefits and Wellbeing at PwC. Saq is also a part of the steering group at the Living Wage Foundation, which has developed the UK’s National Living Pension standard.

Saq has regularly featured in the press, with examples including: