Many Brits are carrying debt into their mid-life years and are more and more contemplating fairness launch as a option to take care of being asset wealthy and money poor, in accordance with newest analysis.
Practically half (45%) of these aged over 50 are nonetheless managing debt, SunLife’s Life Nicely Spent 2025 report discovered, with the monetary strain being felt most in London and the South East.
The quantity total they’ve left to repay averages £23,799 – rising to a mean of £33,590 for owners over 50.
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The 2025 SunLife report finds those that launched fairness unlocked a mean of £69,982, with 36% utilizing the funds to repay money owed and 44% to enhance their properties. Three-quarters (76%) stated these strikes to spice up their funds made them happier.
Mark Screeon, chief govt at SunLife, stated: “Many over 50s have labored laborious for many years but nonetheless discover themselves with some debt. The rising price of residing and ongoing monetary commitments could make IT laborious to benefit from the retirement they’ve deliberate.
“For some owners, fairness launch may provide a sensible and empowering option to unlock among the cash tied up of their property to repay money owed, assist household or just stay extra comfortably.”
How a lot debt do over 50s have?
Mortgage debt stays the most important burden. Larger interest rates leading to increased mortgage rates mean many find themselves paying off their homes well into retirement.
Over 50s have an average balance of £67,538 left on their mortgage and monthly repayments of £842, the report found.
As well as this, almost one in three (30%) over 50s have credit card debt (which amounts to £3,922 on average), one in 10 hold personal loans (£5,793), and a further 8% have overdrafts (£1,575).
One of the biggest expenses outside the mortgage is rising car Finance prices – which 6% of over 50s are juggling – that now common £11,375 per borrower (£1,393 greater than final 12 months’s common).
Execs and cons of fairness launch
Fairness launch can present these aged over 55 with a path to clear long-standing money owed, complement revenue or assist household, all whereas remaining within the residence they love.
However IT additionally carries potential dangers like the potential for accumulating debt, and can scale back the quantity of housing wealth that may be handed on to family members on dying.
The most well-liked type of fairness launch, a lifetime mortgage, is technically a Loan, however normally requires no repayments till you move away or transfer into long-term care. Nevertheless, making advert hoc or common repayments could also be really useful to maintain the price of borrowing down, the place inexpensive.
On common, owners who’d contemplate fairness launch have said they might look to unlock round £81,000, most frequently to clear money owed, enhance revenue or assist family members financially, the Solar Life report discovered.
Others would use the funds for residence enhancements or long-awaited life experiences resembling journey and hobbies.
IT’s vital to take monetary recommendation from an FCA-regulated fairness launch adviser earlier than choosing fairness launch.
Pros of equity release:
- Can provide a lump sum of tax-free cash for any purpose
- Allows homeowners to access their property wealth without having to sell their home
- In some cases there are no ongoing monthly repayments required
- IT’s potential to ringfence a portion of your own home’s worth to your beneficiaries, to allow them to inherit IT
- Affordability assessments are sometimes much less onerous than commonplace mortgages
- Offers the choice to present cash earlier than dying scale back the worth of your property for Finance/inheritance-tax/what-is-iht” data-before-rewrite-localise=”https://moneyweek.com/personal-Finance/inheritance-tax/what-is-iht”>inheritance tax functions
Cons of equity release:
- Equity release is a type of Loan and curiosity is payable on the debt, which might construct up considerably over time leaving much less housing wealth to your family members to inherit
- The utmost proportion of fairness you’ll be able to launch sometimes ranges from 20% to 60% of your own home’s worth
- You could get lower than market worth for the portion of fairness you launch in your house
- The lump sum acquired from fairness launch can have an effect on eligibility for sure means-tested advantages
- IT might be troublesome to remortgage or transfer residence after you have opted for fairness launch
- Early reimbursement fees can apply in the event you repay the fairness launch Loan ahead of anticipated
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