Equity release ‘can provide answer to pensions shortfall’

Posted 12/02/2010

Older consumers should look to equity release as a potential answer to the current pensions shortfall affecting many UK retirees.

This is the view expressed by equity release trade body Safe Home Income Plans (Ship) in response to a recent Pension Policy Institute report, which suggested that many older people cannot sustain their desired living standard using pension income alone.

Ship stated that this problem is likely to become more serious as time goes on, which makes the need for older people to utilise their housing wealth more pressing than ever.

Andrea Rozario, director general of the body, stated that this is a particularly pressing issue given that many retirees are currently living on less than £750 per month, according to Aviva research.

She said: “These people could potentially benefit from taking out an equity release product and we urge them to speak to an adviser who can help them make the most of their retirement finances.”

Last week, MP David Blunkett voiced his support for the use of equity release, which he stated can play a key role in overcoming the “enormous challenges” of retirement funding.