A third of Britons do not save any money and the majority of property wealth is owned by older people near or at retirement.
The latest survey from Lloyds Bank shows that a third of British adults do not save money on a regular basis and 18% wouldn’t survive more than a month if they were to suddenly lose their job.
People aged under 25s are the best at saving money regularly whereas over 55s are the worst at planning their personal finances in advance.
Of those surveyed 30% would only be able to live off their current savings for up to six months and despite knowing the risks of having no cash, 17% admit to not planning their personal finances at all.
About 40% of those that are saving want to buy a property with first time buyers or home movers requiring substantial deposits and they many turn to older family members that could release cash from their home.
Property wealth shifting to older people
According to the Equity Release Council, the population is aging with people 65 years and over increasing by 2.1 million since 2008, half the total 4.2 million rise in the UK population.
Home ownership is shifting with a growing concentration of older households aged over 55 when in 2003/04 there were 39% owner-occupiers in England rising to 51% owner-occupiers in 2019.
Older homeowners that have benefited from gains in property wealth over the past few decades can improve your quality of life by downsizing your home and releasing cash at retirement.
In England about 42% of owner-occupiers were aged 16-44 in 2003/04 decreasing to 30% owner-occupiers in 2019 and only 5% of those aged under 44 own their home outright.
The balance of households who own their home outright has shifted further towards older age groups with 64% aged over 65 and 21% are aged 55-64 owning their home outright.
Homeowners with acceptable property for equity release can access cash for home improvements and buy-to-let landlord to access funds using a lifetime mortgage for their property portfolio.
Find out if your property is acceptable to providers of equity release and the best products to access cash for home improvements with this link:
Free equity release quote for the best products to access cash to improve your home.
People aged over 55 years and nearing retirement are least likely to plan their personal finances in advance with 21% admitting to not planning at all although 53% are confident in their ability to manage their money.
For older homeowners there is higher activity with equity release mortgage buyers able to stay in their homes while accessing wealth in their property to repay their current interest only mortgage or help maintain their standard of living.
Younger people actively saving
Those in the 18-24 age group are the most dedicated savers with 78% actively saving money compared to only 67% of all UK adults.
The main reason was first time buyers looking to get on the property ladder or fear of losing their job although 29% confess to struggling when it comes to managing their money.
Help with the deposit can come from older family members such as grandparents using a lifetime mortgage and first time buyers can agree to pay the interest on the loan to reduce the cost of equity release.
Jo Harris Managing Director at Lloyds Bank said, millions are at risk of not having savings to fall back on should they lose their job or have to stop working.
While it might seem like a slow uphill battle, small savings can really add up and when done regularly over a long period of time it can result in a significant sum, says Jo Harris.
Of those that are saving the main reason cited by 66% was for a rainy day and 48% in case they lose their job.
What are your next steps?
Call our LCM mortgage brokers for advice if you are a first time buyer, want to remortgage your existing home for the best mortgage deal, moving home or a buy-to-let investor.
For equity release buyers our London City Mortgage advisers can recommend lifetime mortgages and specialist legal advice allowing you to receive cash from your property, gifting to a family member or even pay for care at home.
See what the figures look like to access cash from your home using a lifetime mortgage to give to a first time buyer for a deposit using this link:
Free equity release calculator with instant results to release cash from your property.
