Why the Need for Equity Release Could Be Greater Than Ever

For many years, retirement planning has focused almost exclusively on pensions. But growing evidence suggests this approach no longer reflects the financial reality facing millions of people. Findings from the Retirement Readiness Index, alongside AIR’s whitepaper “The Home Belongs in the Plan” point to a clear conclusion: housing wealth can no longer sit on the sidelines of retirement planning.

A growing problem: inadequate retirement saving

The Retirement Readiness Report paints a concerning picture of how underprepared people are for later life:

17% of people are not currently saving for retirement at all

68% do not contribute regularly to a personal pension

48% are not saving into a workplace pension

These figures highlight a wider issue rather than individual failure. Rising living costs, housing affordability pressures, insecure employment, and competing financial demands mean that pension saving is often reduced or postponed, sometimes indefinitely.

As a result, many people will reach retirement with incomes that fall well short of what they need to live comfortably.

The retirement income gap is widening

While the state pension provides a foundation, it was never designed to deliver financial security on its own. Yet for a growing number of people, it may become the primary, or only, source of guaranteed income in later life.

AIR’s whitepaper highlights that advice frameworks which focus narrowly on pensions risk overlooking the true shape of a client’s balance sheet. When pension savings are insufficient, the gap between expected income and actual retirement needs becomes unavoidable.

That gap needs to be addressed somewhere.

The overlooked asset: the home

Despite widespread under-saving into pensions, many people approaching later life hold significant wealth in their homes. For decades, property values have risen steadily, meaning housing wealth has often grown by default, even where pension saving has not.

As “The Home Belongs in the Plan” argues, excluding property from financial planning ignores what is often a client’s largest and most flexible asset.

Equity release and other later life lending solutions allow homeowners to access this wealth in a controlled, regulated way, without having to sell or move. For many clients, this can provide:

• A sustainable supplement to retirement income
• A way to repay existing mortgages or debts
• Funding for care, home adaptations, or lifestyle needs
• Financial support for family members

From product-led to client-centred advice

AIR’s whitepaper makes a critical point: later life lending should not be viewed as a last resort or niche product, but as part of a holistic, client-centred advice process.

When nearly half of people are not saving into a workplace pension and more than two-thirds are not contributing regularly to a personal pension, advisers must work with the reality clients face, not the ideal retirement model.

Client-centred advice means:

• Considering all assets, not just pensions
• Understanding how housing wealth fits into long-term goals
• Exploring sustainable income strategies across later life

In this context, equity release becomes less about “unlocking property” and more about unlocking better outcomes.

The change is already underway

The data suggests this is not a future problem – it is a current one. As traditional retirement funding routes fail to keep pace with living costs and longevity, later life lending is moving steadily into the mainstream.

Modern equity release products, supported by stronger regulation and consumer safeguards, are far removed from outdated perceptions. Used appropriately, they can play a vital role in improving financial resilience in later life.

Rethinking retirement planning

The message from both the Retirement Readiness Report and AIR’s whitepaper is clear: the home belongs in the plan.

Encouraging better pension saving remains important, but it is no longer sufficient on its own. For many people, housing wealth may be the key resource that enables financial stability, dignity, and choice in retirement.

Equity release won’t be right for everyone, but for a growing number of under-prepared retirees, it may be one of the most realistic and effective options available.

Final thoughts

As retirement readiness declines and pension shortfalls become more common, the role of later life lending will only increase. The challenge for the industry is not whether housing wealth should be considered, but how it can be integrated responsibly, transparently, and in a way that truly puts the client first.

Because in today’s retirement landscape, the home isn’t just where later life is lived – it’s increasingly how it’s funded.