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Avoiding the Retirement Income Shortfall
Did you know, older homeowners are predicting they will need an annual retirement income of £35,196. Which according to a new report is 16% higher than the average income of a full time UK employee.
This figure is almost more than double today’s average annual retirement income of just over £17,000 leaving a potential shortfall of around £18,000 a year. A report by the Equity Release Council “The pension / property paradox” indicates that pension pressures are set to rise. Some of the highlighted issues from the report are;
● The average pensioner’s weekly income is just £7 higher in real terms than it was over a decade ago
● Pension savings and mortgage repayments battle to be homeowners’ financial priority in the run-up to
retirement
● People are supporting dependants (family and relatives) longer than planned and this is eating away
at potential savings
● Living costs are higher than expected for a lot of people also preventing large savings to build up
All these factors and more are prompting early access to pension with more than 1 in 10 over-55 homeowners dipping into that pot of money to support themselves. The number of people at retirement age has increased by 1.4 million in the last 5 years across the UK meaning more people than ever are in the pension bracket – and we are all living longer meaning that number is set to rise.
But there are products and plans that can help ease this and create security and peace of mind for people in later life.
Most older homeowners are unaware that pensions can be left as part of an inheritance as part of a Will and that income from property holds huge untapped potential- on average a homeowner from the UK can unlock around £88,000 from their home
Some of these Equity Release plans can;
● Include rolled up interest rates so there is nothing to pay as you go
● Set up as a tax free pot you dip in to as and when you want to use it
● Payment plans allowing you to pay some or all of the interest or repay some of the capital
● Studies show women and those that have taken career breaks in their working life to support their
family show some of the lowest levels of confidence when it comes to retirement and retirement finance planning.