Research conducted by Prudential has revealed that British people retiring in 2010 are expecting to be worse off than those who left work in 2009 and in 2008.
2010 retirees are anticipating an average income of £16,509 per year. In 2009, this average was £17,759 and in 2008 it was £18,663 showing decreases of 7% and 11.5% respectively.
Andy Brown, director of investment funds at Prudential said: “The recession has clearly had a major impact on peoples’ expectations of their pensions.’
61% doubt retirement income will be sufficient
Also shown by the figures is scepticism that pensions and savings will provide sufficient income to enjoy a retirement that could be constituted as comfortable. 61% doubted they would have enough money when they left work and 18% anticipated an annual income of under £10,000 a year.
Losing out on Luxuries
Geoff Charles of independent equity release specialists Bower says: ‘A £1,270 reduction in the annual income in retirement constitutes a fair amount each month; an amount that could mean the difference between, say, taking a holiday, pursuing leisure interests or treating the grandchildren. If this income is set to continue falling, as it has done for the past two years, clearly it’s time to start looking at alternative ways of raising money to live on in retirement.’
£22.3billion Increase in Equity
Geoff Charles suggests one of these ways could be equity release and says, ‘According to the Bank of England, homeowners have increased the equity in their homes by £22.3billion in the past year which means lots more of them could be reaping the rewards of releasing some of that equity to help boost their retirement income.’
Equity release may involve a lifetime mortgage or home reversion plan. To understand the features and risks, please ask for a personalised illustration.
Bower is an FCA regulated independent financial advice company that offers specialist advice on equity release throughout the south of England. For more information e-mail [email protected] or call 0800 4118668. Bower offers a no obligation initial consultation to homeowners considering Equity Release.