Pensions are something of a political ‘hot potato,’ with an ageing population, the baby boomers of the post-war period, now becoming pensioners, the state is struggling to cope. As the Government seeks to get the country out of the financial crisis of 2008, savings rates are also pushed down, as inflation rises, leaving many pensioners worried that they cannot finance the growing cost of living on the back of their pensions. So, if you are in this position, is there anything else that you can do to try and make your financial position more comfortable?
One of the largest assets that homeowners who are also pensioners have is their property. For many retired pensioners, they are ‘asset rich’ and ‘cash poor’, as the largest chunk of their lifetime earnings has gone in to purchasing and maintaining a property. So whilst it is a great positive to own your home at retirement, it also holds a rather dormant value, especially if you have ruled out selling up.
Equity Release can be considered as a halve way house, it’s not selling up, but it is not struggling on either. Considering the value of many homes these days, it can be very frustrating indeed for our retired pensioners who have houses worth half a million pounds (some of them) yet they have to choose between “heating or eating” if you are in this situation, it is important that you do not delay assessing you financial situation as it is important to your health and your families peace of mind that you are not going without the basic living essentials. Even if you are not certain what financial changes to make or plan it is important that you discuss them with a qualified adviser, be that an
Equity Release Adviser at Ascot , or your local CAB may be able to offer some advice.
The reason why so many pensions are seeking to release equity is purely down to the practical situation they are finding themselves in – their pensions are not providing the amount they were expecting and the cost of living is rising dramatically. Many did not plan, or wanted to plan to downsize, and so have ruled that out as an option. Equity release is therefore considered the best option and it means that you do not have to take out bank loans or credit cards and be hit with heavy interest charges or get into debt. Releasing equity in a property potentially funds much more than a pension would; it gives you a chance to really see your inheritance in action, perhaps funding weddings and university fees for family, for example. It also means that you can remain in the home that they love and be able to enjoy living there, as money has been freed up. However, before taking out any equity release scheme, which are geared for over 55s, it is important to seek impartial advice. Ascot Mortgages can help you with this; providing a free initial consultation means that you can be sure that you are making the best deal for you, with no obligations.
Equity release can often be a more attractive proposition than relying on a pension. As the age at which you can claim your pension rises, then there is the real prospect that you are faced with working for longer. Also, the state pension is not keeping pace with the rising cost of living, due to inflation, meaning that the money that you receive is often eaten up in bigger bills and costs. Finally, for those with a private pension, the falling annuity rates means that the amount that people with private pensions were expecting to receive is often less, meaning that even for those who have budgeted, there is a monthly deficit between income and expenditure.
Whatever your circumstance, it is important to talk to your family before making any big decisions. Retirement is the period when you look for enjoy life, taking time to follow hobbies and meet friends that may have been difficult when you were working full time. It is meant to be a time of relaxation, when you are not worrying about paying the bills. Therefore, if you are finding that your pension is not providing you with enough to live on, then give Ascot Mortgages a call. As market leaders, they are knowledgeable and helpful, meaning that you get the best advice with no pressure or obligation.
For more information please contact Ascot Equity Release:-
http://www.ascotequityrelease.co.uk
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