Further to recent comments from SHIP, demonstrating confidence in the growth of the market, Just Retirement believes current events will also improve long-term confidence in the use of equity release to improve the financial position of retired people.
The effect of market turmoil on pension funds has already been seen during the course of 2008 and, with commentators forecasting little or no improvement for some time, coupled with the likely increase in the level of unemployment:-
Many of those reaching retirement will find their funds lower than they would have hoped
many of those who have been delaying their retirement may be forced to make the best of their circumstances despite reduced funds
unemployment is likely to force the earlier retirement of substantial numbers of those aged 60 or higher whose pensions will not have had the time to reach desired levels
many USP customers will seek to recover their position from recent losses and the potential impact on future income
In these circumstances people will seek to use other assets that may be available to them, although these will also have suffered in recent months. With government figures showing that the level of other savings is low, however, the only major asset available to a significant proportion will be their house. Housing market conditions will deter trading down to a large extent but the availability of drawdown mortgages will enable the provision of funds to supplement other forms of income and leave sufficient funds for use in future.
Just Retirement is therefore pleased to announce an extension to its special offer, removing the setting up fees on its roll-up lifetime mortgage until the end of March 2009. This move will save up-front costs of more than £500 on each case.
David Cooper, Marketing and Distribution Director, says "Removing fees for setting up our lifetime mortgage will help ease the process at a time when money is tight, improving people's ability to adapt to the current climate. The picture may look bleak for those whose retirement is not currently meeting their expectations but there are options for a good many people and it is important that they get the right advice to help them make the best of what they have. The availability of substantial equity in the home could dramatically improve standards of living in many cases, either by providing income explicitly or by freeing up income currently being used in other ways. Advisers who are prepared to look flexibly at all options for their clients will find themselves very much in demand in 2009 and beyond.
This is not a new phenomenon: the treatment of property as an asset for use in retirement planning is gaining in acceptance, for specific uses, to supplement income, to combat the effects of inflation and provide for other needs. We simply believe that the current economic environment will accelerate this trend."
