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B-Advised Blog

Battling the rising cost of living: how Equity Release can help


A storm of converging factors has resulted in the most debilitating fall in living standards in decades, as the UK enters the most profound cost-of-living crisis it has seen for over half a century. Today, we want to discuss how Equity Release can help over 55’s ease the strains of this crisis.

Let’s sum it up quickly: Brexit was followed by twenty-four months of the Covid-19 pandemic. This was, of course, bad enough. However, the tail end of 2021 saw red flags raised in regards to oil and gas prices. As the energy price cap was raised by 54%, the world looked on as Russia invaded Ukraine, considerably intensifying the crisis. Now, predictions outline that inflation could skyrocket up to 8.7% in October of this year, according to the UK’s Office for Budget Responsibility (OBR). As a result of all of these converging factors, we’re now seeing the most substantial real-terms fall in incomes since the 1970’s.

Phew. That more or less brings us up to speed, sort of…

Who could be hit the hardest? 

Aside from low and middle-income families, it is pensioners and those approaching retirement who may very well find themselves in a considerably difficult position right now, particularly if they were set to rely on a state pension alone.

Naturally, concern is growing that over 55’s may be accumulating credit card debt in order to maintain their living standards into their older age. Perhaps, unfortunately, you find yourself in this difficult situation.

Luckily, there are some opportunities that will enable older adults to ease their financial strains. Prime amongst these is Equity Release.

The rising costs of living coupled with the consistent growth of house prices has led many over 55’s to begin to embrace the potential that releasing equity from their home may pose. Last year, older homeowners in the UK tapped record amounts of cash from their properties, with over £4.8 billion being loaned out through Equity Release. According to the Equity Release Council, this presented a rise of 24% compared to 2020, with customers drawing on average 7+ years of pension income from their homes.


rising cost of living

How can equity release help? 

Equity Release loans (also known as Lifetime Mortgages and Home Reversion plans) enable you, as a homeowner, to unlock a tax-free sum of up to 60% your home’s value, whilst ensuring that your property remains solely in your possession for as long as you wish to or are required to live there. This loan is repaid with interest through the sale of your home after your death or after you have moved elsewhere.

Homeowners are able to tap into equity release as a single lump sum or, alternatively, as a series of incremental drawdowns. Equity release loans thus act as an effective way of raising money for retirement, whilst removing the pressure to downsize or move to a less desirable area.

This poses a great solution to the pressures of inflation and rising living costs, as older age is most often the time that individuals are least inclined to make drastic changes in their living circumstances and standard of living in general.

With Equity Release, an individual can top up their income whilst remaining in their home, meaning they don’t have to cut corners or go without when they ought to be focusing on enjoying their free time after many long years in work. If you are concerned about maintaining a sound standard of living into your retirement, you ought to speak to a financial adviser.

According to David Burrowes, chairman of the Equity Release Council, ‘cost of living pressures are just one of many reasons why homeowners are choosing to cash in on years of wealth accumulated in their homes.’.

Alongside the explanatory factor of inflation, the rise in Equity Release loans can also be understood simply through the fact that Equity Release products have evolved considerably in recent years, with new providers and new features adding to the appeal of this form of loan. Additionally, greater regulation through the recent formation of the Equity Release Council has made Equity Release a far more appealing option than in previous years.


equity release for over 55s

Equity release is merely one way in which individuals can minimise the strain of rising living costs. Get in touch today and our independent financial advisers can assess your individual financial circumstances and present you with a retirement plan suited to your needs.