Emotional ties to family homes stop retirees from downsizing
New research from equity release lender, more 2 life, has revealed that an emotional connection to their family home prevents retirees from downsizing.
A survey of 205 IFAs shows that 87% of their clients note this as the most common reason for staying, while 52% say that there is no other suitable property to move into. Advisers have been told by more than eight in 10 retirees that they refuse to downsize due to emotional bonds with their homes, while 20% said that stamp duty charges were too high. Some 35% offer another reason of moving costs being too high and 29% say they have left it too late to move.
More 2 life is encouraging advisers to make retirement planning discussions centred around releasing equity. Their study also shows that 73% of IFAs have had clients ask for advice on downsizing. In addition, four out of five IFAs said they would sometimes recommend equity release as an alternative solution to downsizing if it was applicable to the situation. Only 9% of IFAs would always recommend it as an alternative solution.
Stuart Wilson, Channel Marketing Director at more 2 life, recommended that advisers should make their clients aware of helpful products that will enable them to make that transition without incurring early repayment fees.
He said: “This new research shows that, understandably, many retired individuals are reluctant to move out of their homes and leave behind the memories and connections they have made there. However, for retirees who still require extra wealth for whatever reason, whether that be to repay an existing mortgage, supplement their current retirement income or pay for a once in a lifetime holiday, equity release is an extremely viable alternative option.”
With this sector constantly evolving, more 2 life is using a campaign titled ‘The Bigger Picture’ to encourage brokers to think more widely about their clients’ needs. It will also include viable product features which would meet these, such as flexible repayment options, inheritance protection, and downsizing protection.
Wilson added: “There are a wide range of products available in the retirement lending market which can help meet customers’ needs. Advisers have a crucial role to play in raising awareness among their clients, of both the features and benefits of equity release products.”
“At more 2 life, we understand the importance of advisers in the later life lending process and encourage them to think outside the box when having retirement planning discussions with their clients. By highlighting product features which clients may be unaware of, they may be able to potentially make equity release a solution to helping retirees find an extra funds without having to leave their family homes.”