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Over 50's more likely to be saving adequately for retirement in the UK - Over 50's more aware of the need to save for retirement than those in their 30s to 50s. By Alex Ogilvie (02/07/08) more...
Care Investment allows Fife pensioners and the elderly to stay in their own homes - A £40mn investment from Fife Council in Scotland is targeted at residential care and care at home for the elderly. By Alex Ogilvie (19/06/08) more...
Inflation outlook grim - open letter from Bank of England - Mervyn King predicts inflation rate of 4% and MPC believes a slowing economy is important to reign back in CPI figure. By Alex Ogilvie (17/06/08) more...
Growth in 2009 to be lowest since 1992 - CBI revise their prediction for growth down to 1.3% in 2009, the lowest GDP growth since 1992. By Alex Ogilvie (16/06/08) more...
Expectations that interest rates will rise - May 2008 Bank of England survey on public attitudes suggests more people believe interest rates are on the way up. By Alex Ogilvie (15/06/08) more...
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A House, a Home…maybe even a Pension?
by Ritchie Mehta (25 June 2008)
According to the National Office of Statistics, the UK has an aging population. The latest figures suggest that the population aged over 65 grew by 31 per cent, from 7.4 to 9.7 million, while the population aged under 16 declined by 19 per cent, from 14.2 to 11.5 million.  This poses considerable problems for the Governments pension provision for the elderly as the ratio is now just three workers to every one retired person.
 
It is almost certain that the UK population will have to be much more reliant on making their own UK pension arrangements if their lifestyle in retirement is to be protected.  Recent figures suggest that the UK population is far from making this a reality.  According to the Fidelity Retirement Index the average Briton will see a 53% drop in income once they retire, forcing them to make do with a mere £215 a week – less than being on income support.  However, with a host of new financial products such as Equity Release, could a property act as a pension as well? Could first time buyers actually not only be buying their first home, is it feasible that their new property could become a source of additional retirement income.
 
The answer that may bring widespread comfort is yes - perhaps.  Many financial institutions now offer retiring or retired homeowners the ability to extract the value of their properties without moving out, giving them a secure income.  However the downside to such products is that upon death the financial institution has a claim on the property thus leaving a reduced inheritance or potentially no inheritance for the family.  This type of product has been picking up steam despite the recent downturn of the mortgage lending market.  According to Antony Rafferty of Norwich Union, “equity release has by and large been unaffected by the issues faced by the mainstream mortgage market."
 
If on the other hand, you would like to leave the children or grandchildren something after your gone, then an alternative to Equity Release could be to rent out a part of your home.  This will give you a stream of income each month for you to enjoy and the peace of mind to know you still have your home.  With current UK property market conditions tough many people are finding that renting or letting a room is one way to weather the storm.  This is illustrated by the Association of Letting Agents who suggest that 39% more agents reported that demand outstripped supply, demonstrating the robustness of the rental market generally.
 
So it seems that house purchase can be an alternative (at least in part) to a conventional pension and is therefore worthy of careful and diligent investigation.  However, the options open differ greatly and one should take advice and act carefully when deciding which option suits.    

Latest News
Why House Prices Must Fall
by Editor (06 May 2008)
Speculation about the future direction of house prices dominates the media, but this simple explanation shows why they will drop.

Sources: Motley Fool
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How to sell your house in a falling UK property market - With UK property sellers being outnumbered by 15 to 1 how do you sell your house in a falling UK property market? Added By Ritchie Mehta (04/07/08) more...
A House, a Home…maybe even a Pension? - Can your home really be a method of funding your pension? With the UK population aging we look at a few options to avoid your income dropping by an average 53%. Added By Ritchie Mehta (25/06/08) more...
Life Insurance - What to Look for - It may be hard to think about, and you may not want to, but eventually you’ll have to consider taking out some life insurance cover. Added By Editor (20/05/08) more...
Life Insurance - Brits Shun Policies - According to research carried out by leading mortgage brokers, around 59 percent of homes have no cover secured against them, those that have are believed to have insufficient life insurance cover. Added By Editor (20/05/08) more...
Debt - Changing Habits to Save Money - There are a number of factors and situations which can lead to increasing levels of debt, but also a number of solutions that can help in your debt management. Added By Editor (20/05/08) more...
Retirement Survey

Do you consider your retirement income to be adequate?

No: 26%
Yes: 74%

* Research carried out on behalf of Just Retirement by MBA Independent Researchers, June 2007. (respondents already retired)
 
Planning for retirement in the UK, financial planning for early retirement

Now Retirement is a valuable UK resource to help you do vital planning for retirement and early retirement.  For Retirement planning information and advice related to pensions in the UK Now Retirement is the ideal planning resource. Financial planning for UK retirement can be difficult so why not contact an Advisor for Independent Advice, they could review your circumstances and make sure you make the best of your retirement. If you are planning early retirement an advisor could make your plans a reality. You are right to plan for retirement, retirement living could be difficult without the correct retirement financial advice, so for UK retirement planning advice contact an Advisor today or get up to speed by checking through our pages for articles and news related to planning for retirement - early or otherwise.

 

Now Retirement Archive
Equity Release (21/09/07)