Recent research has found that a fifth of those aged 55 or over feel financially worse off than they had anticipated.
The Sunlife study of 1,000 homeowners revealed that just under half (43%) felt concerned that their pension funds may not cover them for the duration of their retirement. In turn, they are looking for additional methods of growing their retirement income.
Financial pressure on those over 55 stems from multiple channels, which is in turn heightened by economic market conditions. As well as having to consider the growing cost of living and low-interest rates on savings accounts, those nearing or at the start of their retirement have to take into account smaller pension pots and longer life expectancy, meaning their savings need to stretch that much further. What’s more, in light of growing property prices, many retirees will also want to pass on wealth to children and grandchildren, increasing financial pressure even further.
On average, a saver over the age of 55 has around £105,000 in a pension pot and approximately £280,000 of equity stored in property. As reports have found, equity release has become a more widespread way for the older generation to boost their income in later life, having seen significant growth over the past two years.
Commenting on the research was chief executive at SunLife, Dean Lambie. He said: ‘In some ways, there has never been a better time to retire – we’re living longer, enjoying healthier, more active lifestyles and have more freedom to spend our pension savings as we choose. But people are clearly worried they haven’t got a big enough pension to fund their retirement.’
‘Fewer than half of over-55s are planning on leaving their house as an inheritance, instead realising the potential of an asset that’s risen in value markedly over the years by turning to equity release.’
