Andrea Rozario: Is equity release the solution for female retirees?

Andrea Rozario looks at some of the reasons why double the number of single female retirees are withdrawing money through lifetime mortgages than their male counterparts.

The social divide between men and women has been a topic of conversation and heated debate for decades. Are we closing the gap in the workplace and general society? Most definitely. But there is surely more work to do and no one can say we live in a totally equal society. The effects of this uneven world are felt in every facet of our daily lives, and by every age group. One section of society has been hit particularly hard, however – female retirees.

According to a study from 2016 backed by Scottish Widows, women save around 40% less into their pensions pots than men. This issue is exacerbated by the fact that, due to the gender pay gap, women need to put away “an average of three percentage points more than men throughout their careers to enjoy the same income in retirement,” according to research by Prudential. What is more, the reality may be even darker for many women as the Pru’s research assumes a consistent contributions record from the age of 25, which many, if not most, will not have achieved.

It seems, therefore, the chips are stacked against women approaching retirement. So what is the answer? If most women have simply not saved enough to fund their life after work, how can we help them have the retirement they deserve?

Working past pension age will be the reality for most of us and many will have to sell up and downsize – although options such as equity release could be a good fit for those who cannot work and do not want to move.

According to the Equity Release Council’s Autumn 2017 Market Review, 27.4% of new drawdown plans agreed in 2017 were for single women, whereas only 12.9% were agreed with single men. Lifetime mortgages are therefore assisting double the amount of single female retirees than their male counterparts – and the reasons why women withdraw money are even more enlightening.

Instead of the lifestyle and entertainment reasons given by men, women are accessing their equity for more level-headed reasons, such as day-to-day expenses. Women, therefore, may have saved less than men throughout their working lives, but once they reach retirement they are acting prudently to level the playing field – and equity release is helping them achieve some degree of parity.

Without the lifetime mortgage, many women may well be forced to move away from their loved ones into a property completely alien to them just to make ends meet. Of course, the same is true for men who are using equity release, but it is a great success story for our market that we are helping this number of women achieve the retirement they deserve.

Taking control of retirement

While the majority of Westminster sit on their hands and allow the savings gap to grow virtually unchecked, I am proud equity release is being used by so many women to take control of their retirement. As an industry, we do not make enough noise about this fact.

To be able to deliver a product that can allow people, especially women, the power to control their destiny is something we need to talk more about. To ensure every retiree has all the facts, the mainstream media and the government must accept the lifetime mortgage is a versatile product that can help a wide range of retirees, including the huge numbers of women who need more help than anyone.

Ultimately, for those women who have been unable to save an adequate amount for a retirement they may well be facing alone, housing equity can be a life-saver. The real solution will revolve around more people saving more money a lot earlier in life, of course – but, for some, the horse has already bolted.

For the millions who have already failed to save enough for retirement, a solution is needed now. And equity release is one such solution. Accessing property wealth in this way is just one possible avenue – and downsizing and remortgaging in the traditional way will also remain significant possibilities – but retirees, both male and female, deserve the opportunity to make up their own minds.

Andrea Rozario is chief corporate officer at