£11,200 annual retirement income needed – more may turn to Equity Release
Recently published figures from the Office for National Statistics show that the average annual cost of living in retirement in 2015 has increased by 8% since 2014 and now stands at £11,200. This varies regionally with the highest average in the south of £13,000 whilst those retiring in the North East would only require £9,630 on average.
The level of retirement income now required may explain the results of separate research undertaken by Prudential which found that 51% of those coming up for retirement this year are considering carrying on working beyond the state pension age. Whilst some are planning to change jobs or go part time others are aiming to continue working in their current jobs.
With a basic weekly state pension of £113.10 in 2014 there’s a considerable gap between that and the £215 that pensioners require weekly for their living costs. Even the new state pension to be introduced in 2016 is going to undercut the £215 with recent announcements that the weekly amount will be no less than £148.40 although the actual amount won’t be known until this autumn.
Richard Espley, Head of Equity Release, comments:
“These figures set a context for the recent predictions of substantial growth in the Equity Release market during 2015. It’s more important than ever to plan financially for retirement and all assets should be taken into account in a retirement plan.
“A house is a significant asset – for most people it’s their most significant asset. Considering a release of property equity to help fund retirement is becoming a very common approach to meet the costs of living whilst still enjoying a comfortable lifestyle.”
To find out more about the Things to Consider when taking out an Equity Release plan click here
Content correct at time of publication