And equity release customers include £2 million homeowners, says Key Retirement Solutions.
The Budget tax grab on pensioners is increasing the pressure on retired people’s income – and the new 7% stamp duty rate for buyers of £2 million houses adds to the pain, Key Retirement Solutions warns.
Around 4.5 million pensioners are worse off due to the decision to freeze personal allowances – and none of the 10 million-plus retired people will see any benefit from yesterday’s Budget.
Even the 7% stamp duty rate for buyers of £2 million houses could hit the plans of over-65 homeowners to downsize to raise money, Key Retirement Solutions says.
The group has seen an increasing number of equity release customers in the past year with properties worth more than £2 million including a property worth £6.75 million.
The rise in stamp duty which took effect from midnight will add at least £140,000 to the cost of buying a £2 million home and could delay owners’ plans to sell, Key Retirement says.
Around 80,000 homes in the UK are estimated to be worth more than £2 million – and Key Retirement has seen an increasing number of cases involving multi-million properties.
It warned that the Budget has been negative for pensioners with the freeze on personal income tax allowances meaning millions face a tax rise from next year.
Dean Mirfin, Group Director at Key Retirement Solutions (www.keyrs.co.uk), said: “Hitting pensioners at a time when retirement incomes are being squeezed by inflation and low annuity rates and savings rates does not make sense.
“Retired people needing to sell their home to raise money won’t have to pay the new stamp duty rate but could end up paying the price if sales fall through or are delayed.
“We are seeing an increasing number of customers with £1 million and £2 million houses using equity release to free up cash and would expect this could increase.
“The Budget has held out the prospect of a flat rate £140 State Pension which is welcome when it comes but the freeze on personal allowances will have a massive effect on pensioners next year and beyond.”
Key Retirement Solutions’ Pensioner Property Equity Index shows retired homeowners have total property wealth owned outright of up to £749.45 billion.
A third of property equity is owned by pensioners in London and the South East of England – in London over-65s own property without any mortgages worth £125.03 billion while in the South East pensioners own £121.76 billion of property without mortgages.
Anyone looking to release equity from their home can request an independent guide to equity release by calling 0800 531 6010 or by visiting https://www.keyrs.co.uk/free-guide.
For more information, please contact:
Dean Mirfin, Group Director
Key Retirement Solutions
Key Retirement Solutions
Citigate Dewe Rogerson
Kevan Reilly/Paul Griffin
0207 282 1096/1041
About Key Retirement Solutions
Founded in 1998 Key Retirement Solutions is the leading independent adviser specialising in equity release. Key Retirement Solutions is a limited company registered in England No 2457440 with its Head Office at Key Retirement Solutions, Baines House, Midgery Court, Pittman Way, Fulwood, Preston, Lancashire, PR2 9ZH. Key Retirement Solutions is authorised and regulated by the Financial Services Authority.