I’m sure there are many people who checked their pension pots in recent times and quickly looked away or swiftly found something else to focus their attention on. Of course, a pension remains a longer-term commitment which will rise and fall in line with a range of influencing factors on any given day. However, given the extreme market volatility experienced, in combination with the ongoing cost-of-living crisis, it’s little wonder that a growing number of individuals are closely monitoring their retirement plans, in addition to present and future financial scenarios.

In such an uncertain economic climate, it appears that an increasing proportion of retired people are either considering or returning to the workforce due to heightened  financial pressures. As household incomes continue to be squeezed, research from Canada Life revealed that 37% of over-55s who are not currently retired believe they will work beyond their state pension age, the equivalent to over 2.5 million people.

Financial concerns around funding a retirement was suggested to be the key driver for extending their working lives, with half of those who are 55+ likely to work beyond the state pension age due to the belief that their pension pots will be insufficient. 23% were not sure how long their retirement savings would last, and 18% said they had not prepared for retirement.

These factors are leading to homeowners paying greater heed as to how they can best utilise equity which has built up in their homes over the years, sometimes over generations. And this is a trend which is shining an even brighter spotlight on equity release and the later life lending marketplace.

What is the new main driver for equity release?

Historically speaking, repaying a mortgage has been the main reason why people released equity from their home but not so this year, according to recent data from Responsible Life.

More borrowers are reported to have taken out a lifetime mortgage to fund home improvements than repay mortgages for the first time. In the year to the end of September, home renovation was the main reason customers unlocked housing wealth in five of those nine months. Throughout 2020 and 2021, there wasn’t a single month when home improvement topped the list as the main reason customers were accessing this type of loans.

As outlined in the data, this trend may well be a temporary one driven by the pandemic property boom, which has unlocked greater options in retirement for those homeowners who are mortgage-free. However, it also demonstrates how vital it is for borrowers to consider all their options in what remains a complex financial environment. This also places an increased emphasis on the quality of advice they receive.

Product flexibility and stringent safeguards mean later life lending options are one of the most secure and adaptable ways for people to access the money tied up in their home without giving up ownership or risking repossession through fixed repayment commitments. To help more advisers and borrowers on this journey, here at the Envelop Network, we have just introduced a later life lending panel to provide greater levels of support and easy access to an array of solutions to help our ARs – who have the qualifications, expertise and appetite to expand this specialist arm of their business – to better service an array of client requirements.

This is an area of the mortgage market which will continue to rise in prominence and there is certainly room for further growth as more homeowners will be looking to their housing equity to support greater certainty and opportunity for them and their family when they need it the most.

Donna Wells, Director at Envelop