It`s been estimated that the average pensioner will have a retirement funding gap of around £100,000 after they finish work, but equity release could prove to be the solution to that problem.
MGM Advantage has worked out that the ideal retirement income is two-thirds the ending salary, which comes in at about £22,000.
However, the current average income is only £16,000, meaning that individuals will have a shortfall of £6,000 each year unless they take action.
There are regional variations though, with people in the North East and East of England having a smaller gap to bridge than those who live in the South East and London.
However, house values in these latter regions could mean that equity release could prove to be an answer.
With equity release, you remove some of the money that you`ve built up in your property by paying down your mortgage over the years, the gap between what you owe on a property and the value of it is called your equity.
The bigger the gap the more likely you are to be eligible for an equity release scheme.
This can be taken as lump sum, or you could receive regular smaller advances via a drawdown.
You can withdraw different amounts, depending on the provider, your age and the Value of your property.
Your credit history does not really impact on what plans you get, so don`t worry if you have had some credit issues in the past.
First Choice Finance specialise in lifetime mortgages which are one way to release equity from your home.
Explore mortgage deals that could help you plug the retirement gap , find out more at firstchoicefinance.co.uk or call on 0333 003 1505 or 0800 298 3000.
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