URGENT NEED FOR EFFECTIVE FINANCIAL STRATEGIES AND SUPPORT SYSTEMS TO ENSURE A DIGNIFIED AND SECURE RETIREMENT

According to a new study [1], around 21% of retirees say that, after paying off their mortgage, they are “unable to live fulfilling lives” due to insufficient retirement funds. This situation underscores the financial challenges many retirees face, even after achieving what many consider the major milestone of homeownership.

Over a ffth-22%-of retirees surveyed were already reducing or stopping medication spending. Additionally, 15% were skipping meals due to their financial situation, according to data from Senior Capital, which surveyed around 2,070 respondents.

FINANCIAL INSECURITY AMONG BRITISH RETIREES

The figures also showed that 11% of British retirees have no savings at all. Almost one in five retirees across the UK will be on the poverty line as they do not have sufficient money in their pension pots, reflecting a concerning trend of financial insecurity among the older population.

One in seven retirees said that worrying about funding their retirement was the largest strain on their mental health. This highlights the urgent need for effective financial strategies and support systems to ensure a dignified and secure retirement.

UNLOCKING THE VALUE OF PROPERTY

Equity release is an alternative way to help some pensioners access capital to fund their retirement if appropriate. Equity release allows homeowners to unlock the value of their property without selling their home or taking on additional monthly repayments.

Equity release allows homeowners to access the equity built up in their property, providing a tax-free lump sum to supplement regular income whilst still retaining ownership and the right to live in their home for life or until they move into long- term care. This can be particularly advantageous for retired or with limited income, offering financial flexibility and stability without the burden of servicing higher mortgage repayments.

THERE ARE TWO EQUITY RELEASE OPTIONS

The two main types of equity release are the lifetime mortgage and home reversion. Each offers unique benefits tailored to different needs.

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Source data:

[1] Senior Capital surveyed 2,070 respondents – 05.06.24

THIS ARTICLE DOES NOT CONSTITUTE TAX OR LEGAL ADVICE AND SHOULD NOT BE RELIED UPON AS SUCH. TAX TREATMENT DEPENDS ON THE INDIVIDUAL CIRCUMSTANCES OF EACH CLIENT AND MAY BE SUBJECT TO CHANGE IN THE FUTURE. FOR GUIDANCE, SEEK PROFESSIONAL ADVICE.