Top tips for boosting your retirement finances
If you’re in or approaching retirement then your purse strings may well have felt the effects of a reduced income. But you are not alone. In fact, a third of over-65s are getting by on less than the minimum wage, with one in twenty unable to afford Christmas or birthday presents for our loved ones*.
As if bidding farewell to our monthly salaries isn’t difficult enough, thanks to recent pension reforms, consistently low interest rates on savings and thousands of interest-only mortgage plans now coming to an end, it’s become increasingly hard for many of us to maintain the standard of living that we expected to enjoy in later life.
Fortunately there are a number of ways we can boost our retirement incomes. Here’s our top tips for generating a bigger disposable income in retirement:
If you’ve lived in your home for a number of years then it’s likely it will be worth much more now than when you bought it. By moving to a smaller home or a different area you could generate a cash lump sum to boost your retirement finances. Although it is worth considering the costs of moving, which include estate agent fees, solicitors fees, removals and stamp duty, and the cost of decorating and making any necessary repairs to your new property.
- Equity Release
If selling your much loved family home would be upsetting or stressful for you then you could tap into your housing wealth by unlocking a tax-free cash lump sum with an equity release plan. You don’t need to make any monthly repayments and flexible new plans now enable you to make regular or one-off payments towards the interest if you wish to. By its very nature equity release reduces the values of your estate and will reduce the amount of inheritance you leave. Discover how much you could unlock with this free, instant-result calculator.
- Switching mortgages
Did you know there are a number of flexible new mortgage products available for older homeowners and those in retirement? If you still have some years left on your mortgage, or you’re one of the thousands of people stuck on your mortgage lender’s Standard Variable Rate, you may be able to get a much better deal (potentially saving you thousands of pounds in interest) by switching. For an expert independent service that will search the entire market to find a better mortgage product for you, visit Bower Mortgage Company today. Remember, you may have to pay an early repayment charge to your existing lender if you re-mortgage.
- Savings / Investments
Many people in or approaching retirement will have some form of savings or investments tucked away for a rainy day, which you could use to boost your finances. The downside is of course that you won’t have the benefit of that safety net for financial emergencies in the future, such as a new car or boiler if your old one packs in.
- Taking on a part-time job
Getting a part-time job in retirement isn’t just good for your finances; it could see you keep more active, maintain a more structured routine that you’ll be used to from your career days, and of course there’s the positive effects of all that social interaction to benefit from as well.
- Take in tenants
If you have a spare room in your home then it might be an ideal opportunity to take in a lodger to boost your income. For a short-term option you could consider renting a room out to a foreign exchange student over the summer. Have a holiday home? They’re great for letting out for some extra cash – even if it’s just to people you know or friends of friends.
*Mortgage Introducer 10/09/15
This is a lifetime mortgage or home reversion plan. To understand the features and risks, please ask for a personalised illustration.