Research carried out by the Equity Release Council found that single women over 55 accounted for 25% of new equity release (including lifetime mortgages) agreements. This was an increase of 50% compared with figures from 2017.
According to Canada Life Home Finance lifetime mortgages are growing in popularity amongst women in order to ensure a comfortable retirement.
Additional Research from Canada Life found that on average, women believe they will need £1,421 a month after tax to live comfortably into retirement. However, the average single female pensioner receives nearly half of that – £206 a week.
Alice Watson, head of marketing and communications at Canada Life Home Finance, said: “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.
However, 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.
The growth in women using lifetime mortgages demonstrates how equity release can fill the pensions deficit faced by women in retirement.
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.”
The fact that pensions won’t provide enough income in retirement is a key driver for the growth of lifetime mortgages.
Another factor is the demographic shift towards more people living alone.
Recent ONS data showed there has been a 20% rise in solo living amongst those aged 65 or over who will be reliant on just one income to live on.
We expect the trend of people using their property wealth to help relieve some of this pressure to continue.