Covid-19 sparks rise in over-55s considering equity release

Its survey found that as a result of the pandemic, 6% of homeowners over 55 would now consider taking out an equity release plan when they previously wouldn’t have.

SunLife says there are two main reasons why Covid-19 has changed people’s minds about equity release:

1. Those who say the pandemic has made them think that 'life is too short' and see equity release as a way of funding all the things they've always wanted to do.
2. Those who have been impacted financially themselves, or have family who have, and are now considering equity release as a way of boosting falling incomes, pensions or savings.

Many of those surveyed said that having their lives turned upside down by the impact of Covid-19 has made them reassess their priorities and take a more 'money is there to be spent’ attitude to life.

Others, however, are struggling financially and are realising equity release could offer them that vital cash injection they need. Comments included:

- “It [Covid-19] has damaged us financially. We might have moved next year, but I can't think we will do so now. We need to fund university education for our son but used up savings to get through Covid, so might want to use equity release.”
- “I’m in danger of losing my job and still owe a lot of money.”
- “My pension pot has been negatively impacted by coronavirus, while others are worrying about funding care as a result of the crisis. The need for going into a care home and funding it has become more real.”
- “Because my daughters need financial help in a difficult time.”

Simon Stanney, equity release director at Sunlife, said: “Our research shows that Covid-19 has impacted people’s approach to money.

“Some have been forced into looking for ways to boost falling incomes or pensions, or into helping others who are struggling, while for others it has been a wakeup call, making them realise they can’t take their money with them, so they may as well spend it now.

“Earlier in the crisis, we saw a shift in the reasons why people were enquiring about equity release, from ‘enhancing’ their own lives towards ‘gifting’ i.e. looking to release cash to help family members who had been hit by the crisis, so I am not surprised to see there has been a shift in consideration too.”