Inflation in UK has forced many pensioner households to cut down on other expenses. Due to rising cost of food, fuel and travel, over 55s find it tough to live debt-free. The leading financial institutions are worried about the future of the senior citizens.
According to a recent study by a leading insurer, the older population last year reduced their expenses on repaying debts. It has been revealed that they did so to keep up with the rising cost of essential commodities.
In terms of income, there has been increase of 13 percent in the retirement income over past three years. Senior citizens these days earn £1,412 against £1,250 they used to get before 3 years. But, in the meanwhile, if you take a look at unsecured debts, a whopping increase of 36 percent has been recorded.
Simultaneously, fuel and service costs that have sky-rocketed due to manifold increase in inflation rate escalating the worries of senior citizens. Because of all these factors, the cost of household essentials has sharply gone up.
In the present times, the future of senior citizens is looking bleak. With the pension income proving inefficient to keep up with the rising inflation rate, they are forced to mull over alternatives.
Equity release can be an answer to rising costs
Equity release proves as a saviour under such circumstances. The government has also recommended equity release for senior care and lifestyle improvement in retirement. However, senior citizens need to be made aware of the virtues of equity release and the differences it can bring in their retirement.
Misconceptions about equity release
There are still some senior citizens who have similar types of misconceptions about this scheme. The financial advisers report this; clients raise a few questions while discussing equity release matter with them.
Equity release market persists with the hard work to educate and update the common people and particularly those are nearing retirement or already in retirement about the different equity release products. It is suggested to them that under what circumstances equity release can be taken and how it will positively impact their post-retirement lifestyle.
Most people are apprehensive about the inheritance. They suppose equity release will negate even slight chances of leaving inheritance for their children while some are under the misconception that they might lose their house by taking out any equity release product.
Somewhere around 25 percent of financial advisers have to say that most consumers are unaware that equity release guarantees no negative equity on house. Oftentimes, financial advisers have to clarify such doubts from the prospective customers.
In a nutshell, it is the need of house to guide prospective equity release customers and let them know the facts of equity release scheme.