Landmark research reveals a growing number of pensioners living on the poverty line amidst the cost of living crisis

 

  • 18% say their quality of life is going to deteriorate because they don’t have enough money in their pension funds
  • 15% say their biggest mental health strain is worrying about funding their retirement
  • 21% have paid off their mortgage but admit their pension payments still don’t allow them to live a fulfilling life

 
Rudy Khaitan, Managing Partner of Senior Capital – highlights how equity release represents one of the only financing methods available to help pensioners in need

A landmark report from Senior Capital – the UK’s leading later life lending specialist – has revealed that amidst the cost of living crisis, almost one-in-five pensioners (18%) across the UK will find themselves on the poverty line due to not having enough money in their pension funds. Highlighting the sheer number of people that are affected by this crisis, there are nearly 16m people over the age of 60 across the UK – making up a fifth of the population – of which over-85s are set to double to a staggering 2.6m in the next 20 years alone, according to The Health Foundation. In light of these alarming findings, Rudy Khaitan, Managing Partner of Senior Capital, highlights how equity release loans are soaring in popularity as they allow pensioners to remain in their homes whilst also accessing their capital value to help fund their retirement. Due to the surge in house prices over the last 50 years, thousands of pensioners now find themselves in a situation of having a significant amount of capital wealth, but feel they are unable to access this in order to fund their retirement in the present.

In the early 70s, the average house price stood at a mere £4,975, but according to the latest figures released by the Office for National Statistics (ONS) in July, the average house price has skyrocketed to £290,000.

By engaging in equity release, those who are currently struggling have the opportunity to tap into the significant value tied up in their homes, whilst also remaining in them and accessing much-needed funds to alleviate their financial strains amidst the ongoing cost of living challenges.Highlighting the dire need for methods of accessing capital such as this, further findings from the report have revealed that one-in-seven pensioners now say that their biggest mental health strain is worrying about funding their retirement.

Subsequent research highlights why so many of Britain’s retirees are so concerned amidst the cost of living crisis, with 22% already reducing or stopping spending on medications and 15% skipping meals due to their financial situation.

Even for those who are more fortunate, Senior Capital’s data shows that 21% of respondents said that despite paying of their mortgage in full, they were still unable to live fulfilling lives due to not having enough money in their retirement funds. Amidst this new wave of pensioners who find themselves living on the poverty line, equity release loans have experienced a record 23% year-on-year increase as a vital lifeline amidst the cost of living crisis.

According to the Equity Release Council, over 93,000 Brits took out this type of plan/loan in 2022. With the purpose of creating financial liquidity, stability and bettering quality of life, Senior Capital was created to serve a growing number of homeowners looking to access capital from the £800bn currently tied up in property wealth.As traditional routes of unlocking capital become increasingly restricted amidst a lending environment that is stacked against an ageing nation, later-life lending specialist Senior Capital is the first equity release provider to overhaul the financial limitations to life after 60.

By creating a new model of equity release that enables a higher percentage of pensioners to release the cash stuck in their homes, the firm is on course to release millions into the UK economy through higher LTVs and more flexible repayment structures, unique to Britain’s pensionable population.