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10 min read

All the single ladies: More women than ever using equity release to boost their retirement income

Posted in: Research

  • One in three (35%) OneFamily lifetime mortgage customers are now single women
  • Since 2016 the proportion of female customers has risen by 50%
  • Trend being driven by mixture of societal and financial factors
  • OneFamily research shows that women over 55 have £70,000 in retirement savings but an expectation of £20,000 a year[i], meaning they have a third of what they need saved for the average 20-year retirement[ii]
  • Women are taking an average of £88,000 from the equity in their homes, a quarter (26%[iii]) of the total value of their property

    OneFamily data shows that the number of single women taking a lifetime mortgage has increased to one in every three customers (35%) from one in four (23%) just two years ago. Married couples are the most common lifetime mortgage borrowers (42%) and single men are the least likely group of customers accounting for less than one in four (23%), despite also seeing a rise since 2016.

    The trend is driven by a variety of factors including women often having lower pension savings than men, and rising divorce rates amongst over 55s[i].

    On average women take £88,000 from the equity in their homes to boost their retirement income. OneFamily research revealed that women over 55 have saved £70,000 for their golden years but hope to have an annual retirement income of £20,000[ii], leaving them with a significant gap to cover.

    With a retirement life expectancy of 20 years[iii], if they retire at 66 and live until 86[iv], and with a maximum of £8,500 a year coming from a state pension[v], they will need three times this amount. By taking equity out of their homes they are getting much closer to their retirement income expectations.

    Nici Audhlam-Gardiner, Managing Director of Lifetime Mortgages at OneFamily comments:

    “It is heartening to see more women are becoming confident to take advantage of the wealth locked up in their properties. Many lose out on opportunities to save more for retirement, as they are the primary caregivers, taking career breaks to raise children or care for an ill or elderly relative, and so inevitably, end up with less money for retirement.

    “A lifetime mortgage means they can access the equity in their home, gaining an additional income, which they can then use to enjoy their retirement.”

    Over half of these women (52%) are choosing to pay off the interest on their loans, either on a regular or ad-hoc basis, taking control of the amount of money that will be left in the property. They are also choosing to take a quarter of their home’s value in equity, with an average loan to value of 26%, meaning that should they need to, they can release additional money at a later date.

    To find out more about OneFamily Lifetime Mortgages visit: www.onefamily.com/lifetime-mortgages/

    [i] OneFamily realistic retirement research 2017
    [ii]Women over 55 want £20k a year x 20 years = £400,000. State pension £8,500 a year, retirees need £11,500 extra each year. £11,500 x 20 = £230,000
    [iii] OneFamily lifetime mortgage customer data
    [i] ONS
    [ii] OneFamily realistic retirement research 2017
    [iii] ONS – In 2014 to 2016, a woman in the UK aged 65 had an average further 20.9 years of life remaining. (85.9) 86. Retirement age for women is 66 – average retirement 20 years
    [iv] ONS – In 2014 to 2016, a woman in the UK aged 65 had an average further 20.9 years of life remaining. (85.9) 86
    [v] State pension – £164.35 a week x 52