Many South African retirees are “property rich but cash poor” — sitting on valuable real estate but unable to afford rising daily costs. With over half of retirees struggling to make ends meet, equity release could offer a vital financial lifeline without having to sell the family home.
Why many South African retirees are in financial distress
According to Glacier Insights, 51% of South African retirees cannot cover their basic expenses. A key factor is that most retirement savings plans were built for a shorter lifespan and lower cost of living than what today’s seniors face.
Baby boomers were sold the dream: pay into retirement annuities and insurance plans, and you’ll enjoy a similar lifestyle post-retirement. But that dream is fading.
Key financial stressors include:
Soaring medical aid premiums, which can exceed R10 000/month for two adults.
Higher living costs, including utilities and home maintenance.
People are living longer — often 20 to 30 years into retirement.
To cope, many seniors are delaying retirement, reducing their lifestyles, or downsizing out of necessity.
Owning property isn’t always the safety net it seems
Historically, owning a home meant success and security. Families would upgrade as they grew, then downgrade in later years — often tied to the Empty Nest Syndrome popularised in the 1970s.
But in today’s economy, even owning a home can be a burden. Retirees face steep municipal rates, maintenance costs, and ageing infrastructure. Despite this, about a third of South Africa’s 5.45 million properties are owned by people over 60, says Lightstone. Many bought homes later in life, especially in retirement villages — though only 44 000 retirement village units exist nationwide.
For most, the home becomes a non-liquid asset, even as financial pressures mount.
How equity release helps without forcing a home sale
Equity release, also called a reverse mortgage, allows retirees to access the cash value of their home without selling it. Instead, a loan is issued against the property’s equity. The homeowner:
Remains in the home.
Pays no monthly instalments.
Only repays the loan when the home is eventually sold (usually after death or if they move out).
This can significantly reduce financial stress and delay or prevent the need to downsize. It also preserves the sense of dignity and stability that comes with staying in one’s home.
What to know about equity release eligibility
Not all properties or homeowners qualify for equity release. Each provider has specific terms, but the general requirements include:
Minimum age: Usually 55 or older, though some require applicants to be over 70.
Fully paid-off home or a small remaining bond.
Owner-occupied and in good condition.
Minimum property value threshold may apply.
Why transparency matters when choosing a provider
The South African equity release market is still small, with limited providers. Some past abuse in the sector — including hidden fees and unclear terms — damaged public trust.
That’s why it’s crucial to:
Vet the provider’s reputation and read all contract terms carefully.
Avoid unregulated or high-pressure offers.
Consult with a financial adviser who understands retirement planning.
This product is also not typically offered by traditional banks, so expect to do some extra homework.
Consider your legacy before unlocking equity
While equity release can boost your finances now, it may reduce the value of your estate later. Beneficiaries could receive less inheritance, which can cause family friction if not communicated early.
Best practice:
Involve your heirs and financial planner in the discussion.
Ensure all parties understand the long-term implications.
Done correctly, equity release can be a smart and compassionate strategy to help seniors enjoy their later years without financial anxiety.
Local insights for retirees considering equity release
If you’re thinking about equity release, check the value of homes in your area. You may find your property is more valuable than you realise. Visit our listings in:
You can also read our related advice on:
