Older homeowners could face lacking retirement income
Older homeowners are expecting to need a sum 16% above the average income of a full-time UK employee in retirement, according to Equity Release Council and Key.
Data collected by ERC and Key outlines that older homeowners believe they will require a retirement income of £35,196 per year.
The greatest gap is expected to in Yorkshire and the Humber, where the shortfall is anticipated to be £27,723.
Additionally, 16% of individuals are expected to draw on their pension savings early, and therefore eroding their pots.
Key points to property wealth as untapped potential, it outlines that on average property wealth equates to 12 years of state pension payments.
The Equity Release Council and Key are calling on the government and industry to break down the “silos that create tunnel vision when it comes to retirement planning”.
David Burrowes, chairman, the Equity Release Council, comments: “With the UK’s population ageing rapidly, the scale of this issue is only set to become greater.
“An increasing number of consumers must make their pensions savings last over longer retirements with property wealth fast emerging as a viable solution to help meet this funding challenge.
“Our report emphasises the pension pressures faced by many across the UK and calls for property wealth to be better considered and integrated into the advice process.
“A single-product solution to retirement planning is no longer fit for purpose. We must break down the silos that create tunnel vision when it comes to later life financial planning.”
Will Hale, chief executive at Key, added: “Today’s report shines an interesting spotlight on an issue that the vast majority of us will face at some point in our lives.
“How do we juggle our financial responsibilities as we age in such a way that allows us to increase our pension contributions and achieve goals such as paying off our mortgages?
“Sadly, there is no simple answer to this particular question – especially with the slow death of final salary schemes but an increase in longevity.
“However, to me this report suggests that we should be asking an entirely different question -how can we use all our assets to help us achieve our wants and needs in later life?
“While even the boost provided by using residential property, investment and savings as well as pensions might not help everyone achieve a retirement income of over £35,000 – which is higher than the average UK salary – it will certainly help.
“Indeed, taking a holistic approach to retirement planning and ensuring access to good specialist advice will mean that more people are able to enjoy a comfortable retirement.”