|
Equity release offers solution to pensioner problems?
30 January 2008 12:00
With the cost of living set to increase significantly for Britain's pensioners, a new report has advocated that they use an equity release plan to free up some extra income.
Costs faced by pensioners have risen by 14.3 per cent over the past five years and are set to increase again by 6.9 per cent in 2008, according to Newcastle Building Society's study, compared to a projected rise of three per cent in overall retail prices excluding housing.
This owes largely to an anticipated 15 per cent rise in fuel costs and a 12 per increase in the price of food, which account for 14 and 22 per cent respectively of the typical pensioner's outgoings, while a four per cent hike in council tax will also be badly felt.
Newcastle's retail sales executive Bob Mottershead therefore advised people approaching retirement to consider equity release as a potential source of income, adding that it has proven increasingly popular over the last year among asset-rich, cash-poor retirees.
This is borne out by recent data from specialist adviser Key retirement Solutions, which showed that the number of these plans taken out in 2007 was up by 8.6 year-on-year at 30,088, while the average amount of equity released rose by 14.7 per cent to £49,941.
|
