Retirement should be a time to relax, enjoy yourself, and focus on the things that matter most, whether that’s travelling, spending time with family, or simply taking life at a slower pace. As you prepare to retire, it’s important to ensure your finances can support your new lifestyle.
If you need to boost your retirement income, there are a few ways to generate extra cash, and give yourself peace of mind for the years ahead.
Planning ahead for retirement
Planning for retirement is one of the most important steps you can take to secure your financial future and enjoy peace of mind in later life. While the state pension provides a foundation, it often isn’t enough to support the lifestyle many people hope for in retirement. That’s why it’s essential to explore additional ways to boost your retirement income.
One increasingly popular option is equity release, which allows homeowners to unlock the value built up in their property. By releasing equity, you can access a tax-free lump sum or set up regular payments, giving you more flexibility and financial freedom as you age. Whether you want to travel, help loved ones, or simply enjoy a more comfortable life, working with a specialist equity release adviser can help you find the best approach for your unique needs and circumstances.
Reviewing your financial position
A good place to begin is by looking honestly at your own finances. Think about what your lifestyle might cost and how much income you’re likely to receive from pensions, savings, and investments. Planning ahead prior to retirement can save you a lot of time, money and stress, which is why working with our financial planning experts at Bower Wealth could help you plan for the retirement you deserve.
However, we understand not everyone has had the luxury to plan ahead in detail for their retirement which is why we’re here to help you find a solution if you have reached your retirement and are looking to bridge the gap of your retirement income.
Using equity release to boost retirement income
For homeowners, property is often the largest asset, and one way to make use of it is through equity release.
Equity release allows you to access the equity stored in your home in the form of tax-free cash and fund the retirement you want. The released money can be used for almost anything – covering living costs, paying off existing debts or loans, making home improvements, or even helping family members get onto the property ladder.
Equity release eligibility
To proceed with equity release, there is a set criteria you must meet before you can proceed, this involves your age, property value and the condition of your home.
To be eligible you must meet the below criteria:
- You must be aged 55+
- Your property value must be £70,000+
- 75+ years left on the lease if leasehold
- The property must be your main residence
- The property must be in a good, habitable condition
Types of Equity Release Schemes
When considering equity release, it’s important to understand the two main types of schemes available: lifetime mortgages and home reversion plans.
Lifetime mortgages
With a lifetime mortgage, you take out a loan secured against your home, receiving a cash lump sum or regular payments, while retaining full ownership of your property. The loan, plus any interest, is repaid when you die or move into long-term care.
Home reversion plans
Alternatively, a home reversion plan involves selling a portion of your home to an equity release provider in exchange for a tax-free lump sum or regular income, while you continue living in your home rent free for life. The provider will then reclaim the percentage sold when your home is sold after you pass away or move into long-term care.
Each type of equity release has its own features, benefits, and considerations, so it’s vital to consult a financial adviser who can help you compare the options and decide which scheme best fits your retirement goals and personal situation.
Learn more about using equity release to bridge the gap of your pension and retirement income.
Working with an Equity Release Adviser
Navigating the world of equity release can be complex, which is why working with a specialist equity release adviser is so important.
An experienced adviser will help you understand the different types of equity release, including lifetime mortgages and home reversion plans, and explain how each could impact your retirement income, means tested benefits, and estate. They can also help you determine how much equity you could release from your home and what the costs and implications might be.
When choosing an equity release adviser, look for someone who is authorised by the Financial Conduct Authority (FCA) and is a member of the Equity Release Council, ensuring you receive expert advice and protection. With the right guidance, you can make informed decisions about releasing equity, giving you confidence and control over your financial future in retirement.
Flexible Ways to Top Up Your Income
Some people also like to supplement their income with flexible, low-effort activities.
Some popular ways to top up your retirement income include:
Pet sitting – This can offer retirees a chance to boost their retirement income whilst staying active and having a companion to look after.
Renting out a spare room – This can be a popular option with homeowners who have been left with spare empty rooms after their family have moved out, offering a great way to boost their income without needing to work.
Letting a driveway – Letting out a driveway allows a retired person to make extra income from otherwise unused space, making it a simple and convenient way to boost their retirement funds.
Selling unwanted items online – Retirees can boost their retirement income by selling unwanted items online, turning clutter into cash while also simplifying their living space.
Taking up a part-time job – Retirees might consider getting a part-time job to supplement their retirement income, as it not only provides extra financial security but can also offer a chance to get involved with their community and meet like-minded people.
Not only can they top up your income, but they can also help you stay active and connected. Just remember to check any tax rules that apply and notify your mortgage lender or insurer if your property is involved.
Cutting Costs to Stretch Your Budget
Another effective way to make retirement income go further is by cutting unnecessary expenses. Switching providers for utilities, reviewing insurance policies, or cancelling subscriptions you no longer use may feel small in isolation, but together they can free up meaningful amounts of money.
Creating a Comfortable Future
Ultimately, there’s no single solution that works for everyone. A comfortable retirement often comes from combining different approaches – understanding your needs, making the most of your assets, trimming unnecessary costs, and finding small but enjoyable ways to bring in extra money. Above all, seeking expert guidance can help ensure the choices you make today lead to a secure and fulfilling future.
Ready to Explore Your Options?
If you’re interested in learning more about how equity release could boost your retirement income, speaking with a qualified adviser can give you clarity and confidence about the best steps for your personal situation. You can also use our free online equity release calculator to quickly find out how much you could unlock from your home.
Try the calculator today or speak to an adviser at Bower Home Finance and take the first step towards a more comfortable retirement.
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