Released on: October 12, 2010, 5:50 am
Author:
LV=
Industry: Financial
LV= has revealed that 'Home is Pension' is a common mantra among the over-50s workforce in Britain as shown in a recent report published by the retirement specialist. Although 54% of the over-50s believe the value of their home has fallen over the last three years, an estimated 1.2 million 'HIPpies' ('Home is Pension') may use the equity in their home to help supplement their retirement income.
Only 19% of all over-50s still in work feel that they are financially on track to
retire as planned, while the number of working over-50s that believe they may have
to delay retirement for financial reasons has increased hugely, to 41% from just 28%
this time last year. Homeowners over 50 estimate they have lost £60 billion in
property value due to recent volatility in the housing market.
However, this has not put many off using the equity in their homes to help fund retirement, with nearly a quarter of working over-50s considering using some, or all of the equity in their home to fund their retirement. The 'Home is Pension' mantra is so valuable to over-50s, that 54% would suggest their children include investment in property as part of their retirement planning.
When working over-50s were questioned about the impact an interest rate rise would have, LV='s research found that 40% would have to reduce their pension contributions just to meet the higher cost of paying debts. More than four in ten (44%) of all working over-50s and 34% of those aged 60-69 in work, have an outstanding mortgage debt on their home.
Vanessa Owen, LV= Head of Equity Release, said: "It seems to be increasingly commonplace for those approaching retirement to consider using the equity in their property as part of their overall retirement plan. Continuing doom and gloom over volatility in the housing market and seeing some properties fall in value, hasn’t deterred the UK’s "HIPpies" and many are still positive that the equity in their home is their best chance of having a more comfortable retirement."
Of those planning to use the equity in their home, nearly a quarter (22%) believe this is now their best option because their pension savings won’t give them the income they hoped it would, and 13% say it's all they have to rely on after the state pension. Two-thirds (64%) of these said they had always planned to use their property for their retirement: 52% by downsizing their home to release equity and 12% to borrow against their home through an equity release product.
Many over-50s are experiencing a 'double whammy', having seen large amounts wiped off the value of their pensions and investments, whilst also being forced to reduce the amount they are setting aside for retirement due to the pressures of living costs during the recession.
ENDS
Notes to editors
All research was conducted for LV= by Opinium Research in September 2010 amongst
more than 1,172 British adults aged over 50 and in employment.
About LV=
LV= is a registered trademark of Liverpool Victoria Friendly Society Limited (LVFS)
and a trading style of the Liverpool Victoria group of companies.
LV= offer a range of insurance products including home insurance, car insurance, life insurance, pet insurance and over 50 life insurance.
LV= employs around 4,000 people, serves over 3.8m customers and members, and manages around £9.5bn on their behalf. We are also the UK's largest friendly society and a leading mutual financial services provider.
LVFS is authorised and regulated by the Financial Services Authority, register
number 110035. LVFS is a member of the ABI, the AFM and ILAG. Registered address:
County Gates, Bournemouth BH1 2NF.
PR Contact:
Linda Winder
LV=
69 Park Lane
Croydon
CR9 1BG
020 7634 4418
www.LV.com