It`s been estimated that the average pensioner will have a retirement funding gap of around £100,000 after they finish work, but equity release could prove to be the solution to that problem.
MGM Advantage has worked out that the ideal retirement income is two-thirds the ending salary, which comes in at about £22,000.
However, the current average income is only £16,000, meaning that individuals will have a shortfall of £6,000 each year unless they take action.
There are regional variations though, with people in the North East and East of England having a smaller gap to bridge than those who live in the South East and London.
However, house values in these latter regions could mean that equity release could prove to be an answer.
With equity release, you remove some of the money that you`ve built up in your property by paying down your mortgage over the years, the gap between what you owe on a property and the value of it is called your equity.
The bigger the gap the more likely you are to be eligible for an equity release scheme.
This can be taken as lump sum, or you could receive regular smaller advances via a drawdown.
You can withdraw different amounts, depending on the provider, your age and the Value of your property.
Your credit history does not really impact on what plans you get, so don`t worry if you have had some credit issues in the past.
First Choice Finance specialise in lifetime mortgages which are one way to release equity from your home.
Explore mortgage deals that could help you plug the retirement gap , find out more at firstchoicefinance.co.uk or call on 0333 003 1505 or 0800 298 3000.
Homeowner Secured Loans
Rates From 7.1% APRC
Representative Example £30,000 over 72 months @ £679.90 repayments. Total payable of £49,949. 20.1% APRC including £2,975 intermediary fee and a £995 lender fee. Loans secured on property.
First Choice are tied to certain loan providers.
Mortgages & Remortgages
Borrow £80,000 over 25 years
At 4.6% Variable, £461.95 for
300 months. Total Payable
£138,585. Total Cost Of
Credit £58,585 (incl £1360 fee).
Unsecured Personal Loans REPRESENTATIVE 49.9% APR (VARIABLE)
First Choice are tied to certain unsecured lenders.
THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT. Security is required on
Established In 1988. Company Registration Number 2316399. Authorised & Regulated By The Financial Conduct Authority (FCA). Firm Reference Number 302981. Mortgages & Homeowner Secured Loans Are Secured On Your Home
First Choice Finance is a trading style of First Choice Funding Limited of The Old Courtyard, 103 Buxton Road, High Lane, Stockport, Cheshire. SK6 8DX. Copyright protected 2014.