In the last Budget the Government called for £10 billion of welfare cuts in the two years following the 2015 General Election. The Reform study has discovered that only deeper cuts to the welfare state, including health and pensions, will prevent deficits returning and enable people to prepare properly for their futures.
Current government commitments to health and pensions will increase the national debt to 90% of GDP in future decades undoing all of the Coalition’s efforts to repair the public finances.
Andrea Rozario, director general of the Equity Release Council, said: “Deeper welfare cuts may be inevitable to shore up the economy but many elderly people on fixed incomes still have viable choices.
“If the Reform study is right that as a nation we should expect to use our housing wealth to pay for healthcare and retirement then equity release will be a vital prop to our quality of life and a real alternative to being forced to move home.”
The report warned that people aged between 55 and 65 would be hit hardest. This group will lose out from any reductions in government support but have little time to make extra provision for themselves.
Rozario said: “The work of the Council’s Standards Board and the impact of our members’ code of conduct means today’s consumers can rely on professional advice and stringent safeguards if they choose to release equity from their homes. So while Reform expects that people aged 55 to 66 will be hardest hit by future cuts there are products which can be a real help.”
And she added: “We fully endorse the calls for greater support and a stronger focus on the take-up of equity release, to help people fund their later years from the comfort of their existing homes.”