Britain’s poorest households have faced a significant financial setback of £4,500 due to the UK’s cost of living crisis, according to new data from The National Institute of Economic and Social Research (NIESR).
Despite government support, living standards for the poorest families remain significantly lower, with a lasting impact expected until at least 2027. Moreover, research from Senior Capital – a later-life lending specialist – reveals that 35% of Brits say that they cannot afford to fund their retirement.
As the country continues to grapple with the cost of living crisis, the research also found that 32% of Brits are unable to contribute to their pension. This financial strain has forced 21% of individuals to postpone retirement and continue working, fearing they lack sufficient funds in their pension pot.
The ramifications extend beyond financial concerns, with 25% reporting that their greatest mental health burden stems from worrying about funding their retirement. Additionally, 37% express profound anxiety about their quality of life diminishing due to inadequate pension savings. These figures underscore the pressing need for comprehensive measures to address the escalating cost of living and its profound impact on retirement planning in the UK.
Due to the increase in house prices over the last 50 years, thousands of people find themselves in a situation of having a significant amount of capital wealth, however, are unable to access this to fund their retirement and pension pot in the present.
In the early 70s, the average house price stood at a mere £4,975, but according to the figures released by the Office for National Statistics (ONS) in July, the average house price has skyrocketed to £290,000.
Rudy Khaitan, Managing Partner of Senior Capital, points out how 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.
Managing Partner of Senior Capital, Rudy Khaitan, commented:
There is a growing need for new products that offer greater flexibility and choice, particularly in the relatively underserved later-life lending market. For pensioners or anyone planning for their retirement, LTV is a critical component when assessing your quality of life during your later years, so it’s vital to investigate a multitude of options that can help ease your financial obligations, as remortgaging may not always be the right option.
Rudy Khaitan, Managing Partner of Senior Capital
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.
Joanne is the editor for Workplace Wellbeing Professional and has a keen interest in promoting the safety and wellbeing of the global workforce. After earning a bachelor's degree in English literature and media studies, she taught English in China and Vietnam for two years. Before joining Work Well Pro, Joanne worked as a marketing coordinator for luxury property, where her responsibilities included blog writing, photography, and video creation.