According to the Equity Release Council’s Spring 2019 report, single women over 55 accounted for over 1/4 of new equity release agreements made in late 2018, that’s a 50% increase on 2017.

So, what are the drivers behind this demographic shift?

A combination of 3 main factors seem responsible  for this pretty sizeable shift; the increasing need to top up those pension pots; the financial challenges created by today’s longevity and the increasing number of women living independently.   

1. Pension pots not adequately providing

Recent findings from Canada Life’s Retirement Sentiment Index showed that women list £1,421 per month (after tax) as the amount they need to enjoy a comfortable retirement. In reality however, according to the Department of Work and Pensions, 2017-18 saw single female pensioners receive an average of just £206 per week (£921 p/month). That’s a £500 difference in what is needed and what is actually received. So, with pension pots failing to adequately provide sufficient later life income it’s no wonder so many more women are looking for alternative ways to supplement their retirement income.

As Alice Watson, head of marketing and communications at Canada Life Home Finance, tells us “The growth in women using lifetime mortgages demonstrates how equity release can fill the pensions deficit faced by women in retirement.”

Alice goes on to say: “…what we are seeing more immediately is that women are being resourceful. They are aware of the fact that the wealth in their property can help them.”

2. Women are outliving their savings

According to the World Economic Forum’s report ‘Investing In (and for) Our Future’, the average British woman is predicted to outlive her savings by 12 years, that’s 2 years longer than the average man.  And, whilst these these two extra years are great news in many ways, current retirement savings simply won’t cover the lifespan of today’s female retirees so it’s important to remember this shortfall when planning for retirement.

As Alice Watson, head of marketing and communications at Canada Life Home Finance, tells us “The outlook for women in retirement is concerning and the recent findings that show women will outlive their savings by over 12 years is something that policymakers must wake up to.”

Han Yik, Head of the Institutional Investors Industry, World Economic Forum, said: “The real risk people need to manage when investing in their future is the risk of outliving their retirement savings. As people are living longer, they must ensure they have enough retirement funds to last them through their longer lives…”

3. Women are increasingly living alone in later life

Recent data from the Office for National Statistics showed a 20% rise in solo living amongst women aged 65 or over who are reliant one just income. That’s a significant increase in women living alone and a further reason for this considerable upturn in the number of women accessing the benefits of Equity Release.

Commenting on the solo living trend Watson added: “The fact is that we’re living longer and that many people live alone in their retirements. This will put pressure on people’s finances. We expect the trend of people using their property wealth to help relieve some of this pressure to continue.”

“We’re aware that 20% of lifetime mortgages are used to cover daily living expenses in retirement, and the recent uptick in single women taking out loans indicates they’re using the wealth contained in their houses in order to live more comfortably in retirement.”

“As a sector we must be ready and able to help people through sound, regulated financial advice and to provide flexible products with which people can navigate their way through this emerging financial challenge.”

If you can relate to any or all of the above, maybe Equity Release could help you to enjoy a comfortable retirement free of any unnecessary financial burden.

If you have any questions about equity release,
please get in touch with us on 0800 612 6755.

Thanks for reading, we look forward to hearing from you.

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