Will the UK’s ageing population further fuel the demand for equity release?

The implications of an increasingly older population

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The latest Census revealed that there are now more people in the 65+ age group than ever before as the UK’s population continues to age. 

Additionally the charity ‘Centre for Ageing Better’ revealed in its latest report that England is an increasingly challenging place to grow old in. As our population gets older by the day, could we see an increase in the number of homeowners using equity release to boost their finances and quality of life?

This article explores the issue of the UK’s ageing population, and what the implications will be as more of us hit retirement age.

Read on to understand more about:

• The UK’s ageing population in figures.
• Which UK areas have the oldest populations?
• Implications of UK’s ageing population.
• Financial solutions for later life homeowners.

For further information about equity release, call us on 0808 178 3055 or request a call back and we’ll connect you with an adviser. Alternatively, check your eligibility and get an initial indication of how much tax-free cash you could unlock.

The UK’s ageing population in figures

Thanks to advancements in medical care and a greater focus on exercise, diet and healthy living, people are living longer lives in the UK. 

As a result of this and other factors, such as fertility rates dropping to 1.9 births per woman, the population of England and Wales continues to age. It means there’s now more people than ever before in the older age groups. 

Here’s a breakdown of the key findings from the Office for National Statistics following the Census 2021:

• Over 11 million people – 18.6% of the total population – are 65+. At the time of the previous census the figure was 16.4%. 
• Over half a million (527,900) people are aged 90 years or older.
• In 10 years’ time, the number of people aged 65+ will have increased to almost 13 million people or 22% of the population.
• The average age in England and Wales has risen from 39 years in 2011 to 40 years in 2021.
• By 2066 there will be an additional 8.6 million projected UK residents aged 65+, broadly equivalent to the population of London.

Which UK areas have the oldest populations?

The Census 2021 data shows that across England and Wales, the local authorities with the highest number of older residents tended to be in rural or coastal areas. So which areas are most popular?

At the top of the list was North Norfolk, where a third of residents (33.5%) were aged 65 years and over. 

Rother in East Sussex had the next highest population of older residents (32.4%) followed by East Lindsey in Lincolnshire at 30.4%. 

Implications of the UK’s ageing population

The figures from the Census 2021 mean that over the next 40 years, the population will continue to age to such an extent that 26% of the population – or 20.4 million people – will be 65 or over. 

The UK’s ageing population is expected to have significant implications for everything from pensions and housing, to public services, paying for care, financial security and more.

According to the charity Centre for Ageing Better, as the population continues to age, a financially secure and healthy later life is becoming increasingly unlikely for millions of people. Their latest State of Ageing report already shows a sharp increase in pensioner poverty, with almost 1 in 5 people – approximately 2 million retirees – living in poverty in the 2019/20 period. 

So what options are open to those of us in and approaching retirement to improve our finances and quality of life? Read on to find out more.

Financial solutions for later life homeowners

As the population continues to age, further pressure will no doubt be put on already stretched housing, social care, pensions and more. 

With a growing number of retirees feeling the pinch, the equity release industry has already seen an increase in demand over the last few years, with 2022 witnessing record-breaking figures. 

If you are concerned about your own financial security in later life, there are a range of financial options to explore which a financial adviser will be able to discuss with you. Here are just some options worth a consideration:

• Equity release. If you are a homeowner aged 55+ you may be able to unlock a tax-free cash lump sum from your home’s value with a lifetime mortgage. Instead of monthly repayments, the loan plus interest is paid back through the sale of the home when you pass away or move into long-term care. 

To speak to one of our friendly selected equity release advisers for more information, call 0808 178 3055 or request a call back today.

• Retirement interest only mortgages (RIOs). Similar to an interest-only lifetime mortgage, you unlock a lump sum from your home’s value and make monthly payments to service the interest. The capital is repaid when your plan comes to an end, usually when you pass away. An RIO can run for the rest of your life as there is no fixed term. However, you will have to keep up with the interest payments for the life of your plan. 
• Downsizing. A popular financial tool in later life for many people. Downsizing means you can unlock your home’s equity and use the opportunity to find a new property that meets your later life needs.
• Take in a lodger. If you have a spare room in your home and want to generate an income, you might want to consider letting it out. To help the housing shortage, the government is encouraging homeowners with a spare room to sign up to the Rent a Room Scheme.

You can read more about the above ideas plus other financial options you may wish to consider in our article: “Alternatives to equity release.”

If you are a homeowner but not yet 55 then find out how to release equity if you are under 55 here.

About Clare Yates. With over a decade’s experience writing about later life financial planning, Clare offers a wealth of knowledge about equity release, pension annuities, wills, LPAs and more. When she isn’t writing, Clare likes to spend her time baking and going on walks with her husband, two children and their rescue dog. Follow Clare on LinkedIn