With the FCA announcing that some 85,000 interest-only mortgages will mature this year, with a similar number in 2018, those IFAs canny enough to specialise in giving advice on equity release will become as alluring to the over-55s as a hot date with Michael Bublé.
Equity release has principally provided older home-owners with an opportunity to wipe out outstanding debts, from the sum left on their mortgage to those credit card balances which they may have rattled up over the years.
However, a recent report in The Guardian asks whether equity release could play a bigger role in helping younger people onto the housing ladder. Which seems fair enough, but hardly the sort of advice I’d expect from a paper normally associated with policies designed to reduce us all to financial equality. Indeed, what about the less fortunate folks who live in social housing, and have no equity to release?
The Guardian article quoted research from Key Retirement which stated that almost a quarter of people who released equity last year used the money to help family or friends, not just to help the kids onto the housing ladder, but also to co-fund their weddings.
The latter idea strikes me as particularly ill advised. We all know that soon-to-be-wed Shaznay will seize the opportunity as a personal mission to bust the £24,000 cost of the average wedding, order a frothy white dress the size of the 02 arena, a horse-drawn Barbie pink coach to take her to the church, and a reception costing the annual debt of a small South American nation.
Still, this kind of lavish gesture from Nan and Grandad might at least help counter the argument that somehow baby boomers and their forebears have filched the future of the younger generation (incidentally, did you know that the Commons Work and Pensions Committee have been enquiring into whether we are being fair to the different generations in our society? I would have thought there were more pressing issues to consider, such as how to stop government spending money that it doesn’t actually receive in tax revenues).
Never mind that Nan and Grandad saw their meagre savings wiped out by inflation in the 1970s; copped accidents and diseases from working in heavy industry; or that their tax allowance has been slowly whittled away until it’s the same as those in work.
And they also had to put up with Ted Rogers hosting ‘3-2-1’, the most incomprehensible TV game show ever broadcast; that the haut-est of haute cuisine was steak, chips and Black Forest gateau at a Berni Inn; and that Ronnie Ronalde, a man whose sole talent was whistling at the same volume as a Boeing 777, could top the charts with an execrable ballad called ‘In A Monastery Garden’.
Baby boomer or Millennial? You choose…….
Somehow, it’s become acceptable – no, make that ‘obligatory’ – for the elderly to fork out their savings, and even slugs of equity release, to The Young Ones (© Cliff Richard) rather than treat themselves to a few comforts in their latter years.
Catch my fall
Of course, that’s if they have any savings left. Research reported by Phoenix Group, Britain’s largest specialist consolidator of closed life and pension funds, has revealed it has prevented some £30m of potentially fraudulent pension transfers.
In the last six months of 2016, more than a quarter of UK adults had received a cold contact call, via phone, email or letter, about their pensions – and, it is painful to report, seven percent had gone on to release some or all of their pension pot.
It’s the sort of scandal into which Baroness Ros Altmann, the former Pensions Minister, could sink her pearly whites, having become such a powerful spokesperson for pensioners in recent years.
However, in an interview with the Mail on Sunday (just to balance out that bit in The Guardian) she is quoted as saying that she has been intimidated by her experiences in the House of Lords – “I have never before in my life been as frightened as I am now about saying what I think”.
Admittedly, she was talking about the Brexit debate. But, returning to more familiar territory, she condemned the government’s much-trumpeted triple lock guarantee on State pensions as “a con trick, so politicians can say they are doing something.”
Sounds to me that Baroness Altmann may be espying a new career outside of politics. Who could blame her?