Retirees consider equity release as 35 per cent in “fuel poverty”
Many retirees are struggling to make ends meet according to figures from both the Office for National Statistics (ONS) and Institute for Fiscal Studies.
Despite the standard guarantee credit level, set by Parliament to ensure pensioners receive an acceptable level of retirement income, 45 per cent of single pensioners and 27 per cent of retiree couples had an income of less than £10,000 and £15,000 respectively in 2010/2011.
The current standard guarantee credit level for 2011/12 is £137.35 for a single pensioner and £209.70 for a couple.
This is set to increase to £142.70 and £217.90 in 2012/13. However, as the cost of living continues to rise, many pensioners find themselves in ‘fuel poverty’ – where maintaining a reasonable temperature in their homes equates to 10 per cent or more of their income.
Martin Dodd is a pension’s expert at the Midland Investment Agency:
“For pensioners, austerity isn’t a fad. It’s a way of life, imposed on them by plummeting annuity rates and puny interest rates. These figures show in shark terms the sad truth – that for many people, taking retirement means taking a big cut in income.”
Allowing you to release funds from your property, many people are turning to equity release to help subsidise their retirement income; July to September saw a 21 per cent increase in equity release activity compared to the same period last year.
Yet despite its growing popularity and almost mainstream status, it is essential that anyone considering equity release consults both financial and legal advice to ensure they understand the nature of the product and the implications it can have.
Content correct at time of publication