Steep living costs continue to pile on the financial pressure, with people around retirement age suffering the greatest loss of confidence in their future finances.


Nearly four in 10 (39%) of those aged between 65 and 74 years old said they are worried about their future, according to new research from the Equity Release Council, up from 18% in 2021.

The trade association’s biannual Home Advantage study, supported by Canada Life and Equity Release Supermarket, found that the percentage of adults aged 55 to 64 who are lacking confidence about their future finances similarly has seen a sharp increase, jumping from 37% to 51%. Just under a third (30%) of those questioned said they have already used or plan to use pension savings to pay off their mortgages, with higher interest rates prompting many to worry about affording their monthly payments.

Jim Boyd, chief executive at the Equity Release Council, said: “Mortgage repayment pressures mean many households are planning to use their pensions to pay off mortgage debt, possibly at the expense of a comfortable retirement.

“While others are struggling to pay these higher mortgage costs during their working lives which is limiting the amount they can save into their pension. Although many hope to retire debt-free with a healthy pension pot, we mustn’t forget the millions who can’t save or pay down their mortgages and encourage them to consider all their options including property wealth.”

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Equity release may be an option if you need to repay an existing mortgage and are finding it difficult to manage steeper payments, as the loan and any interest only need to be paid back either when you die or move into long-term care. However, it’s essential to seek professional financial advice first as unlocking some of property wealth could affect your entitlement to means-tested benefits. It will also reduce the value of any inheritance you might have been planning to leave, especially as like other mortgage rates, equity release rates have risen sharply in recent years.

Recent data from banking trade body UK Finance shows that many people are putting equity release on hold for now in the hope rates will start to fall soon, with just 6,710 new lifetime mortgages advanced in the final three months of last year, down 40.1% year on year. The value of this lending was £520mn, which was down 57.4% compared with the same period in 2022.

Sarah Coles, head of personal finance at Hargreaves Lansdown, said: “Thousands will be delaying equity release until cheaper deals emerge, but they risk struggling on low incomes in the interim – especially after two years of rapidly rising prices when food and drink prices alone have shot up by 25%.


“The more positive news is that the pressure has been easing since these figures were released, and lower mortgage rates will have taken less of a toll in recent months. However, falling mortgage rates have stalled more recently, as the market digests the fact that inflation is more stubborn than they expected. It means we can’t rely on swift rate cuts to get us out of trouble financially in retirement.”

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