Retirement Advantage highlights FCA equity release concerns
Retirement Advantage has backed Andrew Bailey, chief executive of the Financial Conduct Authority’s assertion that savers shouldn’t rely on one asset class to fund retirement.
Retirement Advantage responded to Bailey’s speech at the Pensions and Savings Symposum at Gleneagles on Friday by reinforcing the importance of not relying on any one asset.
It also highlighted the opportunities presented by no-negative equity guarantees.
Alice Watson, head of marketing at Retirement Advantage Equity Release, said: “There is no doubt that for those in or approaching retirement, a holistic approach to retirement planning which takes into account all assets – including property – is increasingly becoming the norm.
“For many over-55s, their property is the most valuable pot of wealth they have, outstripping pensions or other investments. With defined benefit pensions dropping off, lower returns from savings and property prices continuing to rise, it makes sense that many will draw on the value in their properties.
“Of course, reliance on property alone as a source of retirement income is a dangerous situation and not one to be encouraged. There is a difference between property being a source of income and the source of income in retirement.”
Watson added: “Equity release is proving to be a popular and safe way for retirees to access the wealth stored in their property.
“The no-negative equity guarantee is a great example of the safeguards available; it ensures that the debt customers hold never outweighs the equity they hold. With more and more people using equity release for a wide variety of different reasons, we expect to see its growth continue over the months and years ahead.”