Retired homeowners in Scotland reap benefits

The continuing boom in the housing market has reaped unlikely benefits to the retired Scottish homeowner.

For the year commencing March 2006, research released by Prudential suggests that this select band of pensioners has seen the value of their homes steadily rising by £12.54 million a day, a staggering windfall of £4.58 billion gained by just staying at home.

Ali Crossley, Business Director of Retirement Income at Prudential said: “We were genuinely surprised by just how large the figures were for the increase in property value highlighted by our research. Many retired homeowners will be astonished to learn just how much their property is accruing annually.”

Prudential’s research shows that people aged 65 and over in Scotland who own their homes outright, have a staggering £41.691 billion of property equity, £4.58 billion of which has been made in the last year.

Despite this growing wealth, the cost of living for retired people is also growing. Indeed, analysis of household expenditure between 2002 and 2006 reveals that on average, annual expenditure in households where the main occupant is aged 65 – 74 has increased by around 9 per cent as opposed to a national average of 4 per cent. The corresponding figure for households where the main occupant is aged 75 and over is 10 per cent.

Ali Crossley, added: “Retirement is becoming more expensive but homeowners have seen the value of their properties rise dramatically in recent years, which means more retired homeowners are releasing equity from them. Indeed, retired homeowners have released approximately £302.3 million between May and July this year through equity release plans.”

Prudential’s Property Value Release Plan is open to homeowners where the youngest applicant is aged 60-84. The amount you can release depends on your circumstances, including your age and the value of your property. The plan allows you to release an initial lump sum, and then more whenever you like, with the maximum amount you can release going up every year. Alternatively, you can just release one larger lump sum whenever you like.