In recent news, Legal & General has announced that it is lowering the minimum drawdown on its lifetime mortgage products. This move is designed to give customers greater flexibility in how they use their retirement funds.
A lifetime mortgage is a type of loan that allows homeowners to access the equity in their home without having to sell it. The loan is secured against the value of the property, and the homeowner can use the funds for any purpose. When the homeowner dies, the loan is repaid from the sale of the property.
The minimum drawdown on Legal & General’s lifetime mortgage products was previously set at 25%. This meant that customers had to take out a minimum of 25% of their total loan amount each year. This could be a significant amount of money for some customers, and it could limit their ability to use their retirement funds for other purposes.
By lowering the minimum drawdown to 10%, Legal & General is giving customers more flexibility in how they use their retirement funds. This could be particularly beneficial for those who want to use their funds for investments or other purposes. It could also help those who are looking to downsize their home but don’t want to take out a large lump sum.
The move by Legal & General is part of a wider trend in the industry towards providing customers with more flexibility in how they use their retirement funds. Other providers have also lowered their minimum drawdown requirements, and this could be an indication of things to come.
Overall, the decision by Legal & General to lower the minimum drawdown on its lifetime mortgage products is a welcome move that will give customers greater flexibility in how they use their retirement funds. It could also be a sign of things to come, as other providers may follow suit and offer similar products.