Retirement for John and June is “a whole new chapter in life”. But it hasn’t always been that way.
“There were some initial challenges when I retired,” admits John. “I used to be the chief executive of a company that I had built from nothing, and suddenly I no longer had a role. But this change that I feared has been the best part of my life.”
The couple have lived in the same village for 30 years, and are deeply rooted in their community. Both are very active; June plays tennis three times a week, works hard on her vegetable garden and sings in Rock Choir; John plays golf, piano and guitar; and both are keen cyclists. They are closely involved with their local sports club, where June is membership secretary and John chairman.
It sounds idyllic, and they are both grateful for the time they have been able to spend together, and the freedom to do more. Their large family home is perfect for Christmas and Easter, but with their four children all grown up and living elsewhere, the couple were considering downsizing. It didn’t hold any appeal.
The important role their home played in their lives
“We love this village, we love this house, and we love the space,” says John. “I don’t think we’d ever find another place like this. But I can’t do the jobs I used to do; we knew we had to plan for the significant costs of getting people in to do those jobs. I’m also 17 years older than June, and we wanted to make sure her financial future was secure.”
Those concerns were solved with a Legal & General Lifetime Mortgage, a form of equity release that turbo-charged the couple’s finances, but allowed them to continue living in the home they love. It gives June the luxury of security now, but choice further down the road; she will be able to decide whether to stay in the house or move somewhere more suitable. More importantly, they were able to help out their children at a critical stage in their lives.
“Our children will get our money when we die, but that’s not the time they really need it. They need it now, when there are bills coming through the door and their own children to bring up,” says John. “This is the best use we can make of the benefits we have gained of being able to buy a house like this back in 1991.”
How equity release helped them support their family
When their youngest child got divorced, they were able to help her find a place to live nearby, which had the added bonus of being able to spend more time with their granddaughter.
“It makes me feel great, because we can help our children through a crisis, without having to sell our home when we don’t want to do that, or change our lifestyle,” says June. “And it’s given me complete peace of mind; I know that if something does happen to John, I can stay in this house if I want to.”
The couple didn’t take the decision lightly, and spent many hours weighing the pros and cons. According to June, “After having had a mortgage for so long and finally paying it off, the thought of taking on another debt seemed a bit silly at first. So I took a bit more persuading.”
Once she felt comfortable with the decision, there was no stopping her, and neither of them has any regrets at all. They investigated different providers, but were impressed by the patience and professionalism shown by Legal & General. “You’re in control from the start. You know exactly what money has to be paid back at any stage, and what the penalty clauses are,” says John.
Interestingly, the lifetime mortgage has been an impetus to improving their property, providing the money to bring in tree surgeons and to renovate a dilapidated old pond.
“John wanted to fill it in, but I’m very interested in nature, and in the past few months we’ve been turning it into a wildlife pond,” says June.
John believes the mortgage “keeps you on your toes. We want to make sure we keep the property in really good shape; obviously with a lifetime mortgage there’s a financial reckoning down the road, but there’s no reason why, if June is still here in 25 years, the value of the property won’t have gone up significantly.”
But there’s enough in the pot now for them to be planning an extended trip: visiting family in Australia, and then taking in Pacific countries such as Fiji. They are also thinking about a visit to South America, as well as looking at buying an electric car.
“It’s the best decision we’ve ever made,” says John. “We have all the benefits of living here, but all the benefits of being able to help ourselves, our children and our grandchildren – and having a lot more fun.”
How a lifetime mortgage works
Whether you’d like to help a loved one onto the property ladder, travel somewhere new in your retirement, or something else entirely. For homeowners over-55, a lifetime mortgage could be one way to help you achieve your dreams. A lifetime mortgage is a loan secured against your home. It allows you to access cash without having to move home or downsize.
The loan is usually repaid from the sale of your home when you die or move out of your home into long term care. Interest is charged on a compounding basis, which means that any unpaid interest is charged on the loan amount plus any interest already added.
Our team of specialists can give you expert advice, as it’s important to consider all your options, and there may be cheaper ways to borrow money.
A lifetime mortgage will reduce an inheritance and, if you do decide to gift money away, the recipient may have to pay inheritance tax in the future (find out more at gov.uk/inheritance-tax).