Boosting retirement finances, home improvements and helping children buy a property among the main reasons homeowners would release equity
Benefits include no negative equity guarantee and ability to make optional repayments
Santander UK announces extension of its partnership with L&G to refer homeowning customers, over 55, for later-life lending advice
New research from Santander UK shows that a quarter of homeowning adults would consider using equity in their property to support their financial position in later-life. The findings come as the mortgage lender today announces the extension of its partnership with Legal & General (L&G) to expand access to later-life lending options to homeowning customers, aged 55 years and over.
When asked what homeowners would release equity for, just over a third (33%) said they would access money to boost their retirement finances, around one in four (23%) would use it to complete home improvements, while 15% said they would use some of the equity in their home to help their own children onto the property ladder.
Aaron Shinwell, Chief Operating Officer, Homes division at Santander said: “Looking at options to manage money into retirement is increasingly important in today’s society and as a major mortgage lender, we know that many customers are keen to understand how they can make the equity in their property work best for them.
“Since 2016, we have partnered with Legal & General to help customers access the equity within their property, and we’re pleased to open this support to all mortgage customers aged over 55, to help them understand and access the choices available to them in later-life.”
From today, Santander will contact customers, who it believes would be eligible for the later-life lending options offered by Legal & General, to provide more details about the options available under the partnership. Interested customers can contact Santander’s mortgage team to discuss their current situation and what they’re looking to achieve from later-life lending and, where appropriate, customers will be introduced to Legal & General’s qualified advisors to discuss the options available.
Craig Brown, Chief Executive Officer at Legal & General Home Finance said: “With almost eight years in collaboration, we are excited to be expanding our partnership with Santander, offering lifetime mortgage solutions to more customers. Over the years, we’ve seen a growing demand for later life lending products, which we expect to continue, in line with high values of property wealth and changing retirement needs. We’re dedicated to making sure that both customers and advisers are supported and that customer outcomes are at the front and centre of every process.”
Santander’s research also showed that worries about understanding the costs associated with equity release (29%), having nothing left for children to inherit (27%) and concerns about owing more than the property is worth (24%) put some homeowners off using equity in their homes through a later-life mortgage. Furthermore, one in five homeowners were worried about using an unreputable company, while one in ten said they didn’t know where to turn for help or advice.
Jim Boyd, Chief Executive of the Equity Release Council, said: “We know that the myths surrounding equity release, and lifetime mortgages may be putting people off exploring products that could help unlock their finances into retirement, and it’s our role to make sure that the industry presents the facts and holds itself to the highest of standards for customers. It’s great to see Santander and L&G, both members of the Equity Release Council, acting in partnership to bring trusted advice to a wider range of customers, and making sure they are fully informed about the choices available to them.”
A lifetime mortgage can offer customers the following benefits:
· Tax-free cash – the money borrowed with a lifetime mortgage remains tax-free.
· Release equity when it is needed – there’s flexibility to borrow more in the future if the full sum is not taken out upfront.
· No regular payments – there’s no need to make any monthly interest payments.
· Optional repayments – there is choice to make partial repayments to manage the amount owed on the loan and interest.
· No negative equity guarantee – Legal & General guarantees that the beneficiaries will never have to pay more than the sale value of the property provided the property is sold for reasonable market value, and terms and conditions are met.
