Just Retirement: Equity release customers are not claiming their benefits entitlement

by Oscar James on June 5, 2012

Many of those taking out equity release in order to help finance their retirement are not claiming the state benefits they are entitled to, according to Just Retirement. Just Retirement Solutions (part of the Just Retirement Group) said that this applied to over 50% of the people they had spoken to who were thinking about taking equity release. The data the company released showed that a fifth were not claiming any benefits at all, which is an increase of 2% from the figure recorded two years ago. It also showed that the average amount of money that was being missed by not claiming these benefits was £872 per annum. Finally it was found that over a third were receiving some benefits, but not all that they were entitled to, leaving them £676 a year worse off, on average.

These figures show that many over 50′s that were considering releasing the equity tied up in their home may do so without even claiming the maximum income they are entitled to. Stephen Lowe from Just Retirement said it was more evidence of the financial pressures being placed on the ‘squeezed middle’ who were finding it increasingly hard to make ends meet. He added that although some would point to high inflation and low savings returns, the fact of the matter is that many are retiring on pension funds that are…”…simply too small to sustain them.” Experts believe that the figures also indicate that more people are using their property as a means to fund day to day expenses, rather than to buy one large, big ticket item such as a car or holiday. The advice for those aged over 50 that maybe struggling financially is to seek proper advice about the benefits system.

What these figures do show is that with inflation high and annuity rates low, the number of people looking towards equity release is only set to increase in the coming months and years. Traditionally releasing the equity in one’s home has been used as a means to make big, one off purchases such as an exotic holiday, new car or house extension. However it now seems that retirees are using it merely to keep up with day to day bills, rather than to treat themselves and/or their family. Indeed a survey conducted on behalf of the Equity Release Council found that 72% of people in the UK would consider using their property as a means of funding their retirement years. Equity Release customers are also getting younger and now span all income brackets, rather than being the preserve of those with larger, more valuable properties.


Related posts:

  1. Just Retirement reports bumper annuity sales in Q1
  2. Standard Life boost annuity rates for existing customers
  3. Survey finds that living standards will drop for many over 50′s once in retirement
  4. Low Annuity Rates mean you need to be flexible in retirement
  5. Tom McPhail talks about what you should think about when approaching retirement

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