Two thirds of pensioners get by on less than £10,000 a year, however because their generation saw the biggest increase in property wealth, equity release is an increasingly viable option for them.
Even more worrying is the raft of cost cutting measures they are taking to reduce their outgoings in retirement, which includes scrimping on food, clothes and heating bills.
Almost a third of those questioned said they had taken cost cutting measures, with 11 per cent admitting that they had stopped taking holidays, reduced their spending on clothes, toiletries and footwear and a further 11 per cent have cut down on socialising.
In addition, 9 per cent have cut back on the amount of time they keep their heating on, 6 per cent have reduced their spending on food and a further 5 per cent have stopped using a car.
The study was compiled as part of ongoing research to support Norwich Union’s equity release offering. The company recently revealed that Britain’s over 60s are sitting on a property equity goldmine of £841 billion, equivalent to £82,446 per person.
In the regions, those most likely to make changes to their lifestyles in order to finance their retirement are, in order:
1. North East (41%)
2. London (40%)
3. South West (34%)
4. West Midlands (34%)
5. East of England (32%)
6. Wales (30%)
7. East Midlands (30%)
8. North West (30%)
9. South East (29%)
10. Yorkshire & Humberside (27%)
11. Scotland (26%)
Despite having to make these cutbacks, only 29 per cent of the over 60s questioned are claiming benefits to help them through retirement, with 70 per cent believing that they are not eligible.
Money worries weigh heavily on the minds of Briton’s over 60’s, with the increasing costs of household bills of major concern to almost one in five. The future is also a worry, 16 per cent fret about how they would afford long-term care should the need arise, while 11 per cent are anxious that they may not have enough money to live comfortably in their retirement. Being unable to leave an inheritance is a worry for 6 per cent, while 5 per cent are apprehensive about having to rely on their family for support.
Dominic Fraser-Smith, group product manager at Norwich Union Post Retirement Products, commented: “This research paints a concerning picture of the struggles faced by the UK’s over 60 population. Their golden years should be spent enjoying the fruits of their labour rather than worrying about their finances. There should be no need for pensioners to be taking measures such as reducing the amount of heating they use in their homes when they are sitting on a potential goldmine of £841 billion – the amount of housing equity owned by the UK’s over 60 population.
“While equity release is not necessarily the right course of action for everyone, it does have place in the world of retirement funding and it is an option those approaching retirement should consider as part of their retirement planning.”
