18% of over-40s state that increases to the state pension age have affected their retirement planning and 24% say they will retire at their new state pension age, according to new research from Canada Life.
On average UK homeowners aged 40 and over, expect to access their retirement wealth at 64 years of age. The main sources of wealth they’ll be accessing include workplace (45%) and state (28%) pensions. The UK state pension age currently stands at 66 and is set to rise to 67 between 2026 and 2028 and based on current law will then rise to 68 between 2044 and 2046 for those in their 40s today.
The findings also show that equity release is becoming an increasingly popular way of unlocking wealth in retirement. With the full basic State Pension currently £179.60 per week, or £9,350 per year, the research found that 12% of UK homeowners aged 40 and above, plan on releasing equity from their property to supplement retirement income. The average age they would consider releasing equity stands at 66 years old.
Further data from Canada Life’s ‘reasons for loan’ analysis for Q1 2021 shows, alongside retirement income, other popular uses for releasing equity including to clear an existing mortgage (45%), make home improvements (34%), consolidate unsecured debt (20%), and to have an emergency fund (15%).
Alice Watson, head of marketing, insurance, Canada Life, said: “As retirement journeys continue to evolve and fragment, driven by societal and regulatory change, holistic financial planning is becoming increasingly important. The wealth tied up in property is growing and is increasingly being used as a part of effective retirement planning, working alongside existing pension savings.
“While releasing equity from property is a long-term decision that should include discussions with wider family, with the right advice it has a valuable role to play. It not only allows people to unlock the wealth stored in their property in a flexible and safe way, but also helps to support retirement lifestyle choices.”