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The housing market is now slowing and in fact in London there is evidence that for the moment at least prices are actually falling slightly. Meanwhile stockmarkets particularly in the US, Europe and Japan continue to surge meaning some of our clients have achieved double digit annualised returns over the last five years. Yes it is possible to achieve those returns without the use of a Ponzi scheme Bernie Madoff!.
However these returns are exceptional and we would never rely on them when modelling for how much our clients need to contribute to their pension or investments to fulfil the standard of living they wish to attain in retirement. With increased flexibility in relation to accessing your pension there is also increased risk of a shortfall and therefore the greater the provision for pension the less likely that will occur..
One further area in providing for your retirement is of course your home particularly for those who bought many years ago. Those wishing to release some equity can of course sell and downsize or alternatively borrow on the value of their home if they meet stringent affordability tests in retirement. Finally they do have the option of using a lifetime mortgage which means no payments to make until they pass away providing money in retirement without the concern of meeting monthly payments that can’t be afforded..
The equity release market is rapidly expanding with over £2.15 billion property wealth released in 2016. With the former prevalence of interest only mortgages approximately a quarter of the funds are used to pay off the outstanding capital sum for which no provision had been previously made. With 40,000 interest only mortgages due to mature each year for the next five years the surge in equity release shows no signs of abating..
So whether it’s achieving the best possible returns on your pensions and investments or seeking the most suitable mortgage for your circumstances in, or prior to, retirement, Aurora Financial Solutions have the expertise in every area to make the most of your financial future.-Alistair Murdoch