Lifestyle Options - Sarah

Supplementing insufficient pension savings


  • 72 years old
  • No pension pot
  • Owns her property mortgage free
  • Needs additional funds to see her through her retirement

Sarah is concerned about her future income. She doesn’t have her own pension pot and wishes to supplement her state pension so she can maintain her current standard of living. She owns her £450,000 terraced house in Bristol mortgage-free.

She has lived in her home for more than 25 years and doesn’t want to move out because of her emotional attachment to her home. She has decided that she also wants to retain ownership of her property for her future security. The upheaval of having to move house is also a concern for Sarah, so she doesn’t want to sell her home to generate money for the rest of her retirement.

Traditional lenders will not lend to Sarah because of her age. Her financial adviser suggests a lifetime mortgage so she can release a lump sum from her home and not have to worry about moving or about monthly repayments. Instead, the interest rolls up and is added to the mortgage each month.

Sarah can use the cash she released to top up her state pension and fund her retirement, while allowing her to stay in her home and retain ownership of the property. She is also able to come back and borrow more, as and when she might need to, all with the benefit of no monthly interest repayments.

Key benefits:

  • Sarah has increased her income in retirement, without having a pension pot or having to sell her home
  • No monthly repayments
  • Flexibility to borrow more money in the future

Important information

This case study is a worked example and is for illustrative purposes only. We have taken care to ensure the information is accurate, but we accept no liability for any of the information we provide that you decide to use or for the suitability of any of the statements made. Individual financial advice and tax advice should be sought prior to taking out a lifetime mortgage, as releasing equity can change the inheritance tax position of the borrower and their estate, as well as potentially altering their eligibility for welfare benefits.

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