According to a study published by European Insurance and Occupational Pensions Authority (EIOPA), the new Pan-Europe pension deficits calculation rules can bring £150 billion funds in UK. This fund will be used to meet targets of defined benefit pension schemes in the country.
In yet another announcement, Chancellor George Osborne has emphasised on the government’s commitment to speed up new and simple pension overtures. According to Osborne, critic-centred cap on social care cost is also set to introduce almost at the same time.
Single-tier pension plan and cap on social care cost is set to launch a year earlier
The UK government has decided to bring single-tier pension scheme a year earlier than the due date was announced previously. Talking benefits of this plan, Osborne has declared that single-tier pension plan will come into effect from 2016, it was set to launch, before, in 2017.
Cap on social care cost is also to be introduced at the same, though the cap has been reduced from £75,000 to £72,000.
Osborne was forthright in saying that one requires paying up £72,000 only once and state will bear the care cost of senior citizens for rest of life.
To level pension disparity, single-tier pension plan is set to introduce at £144 per week. The Chancellor was up-front with praises for this “generous” pension scheme and claimed it as a massive boost for retirees keen on retirement savings.
However, it’s to be seen how new pension plan and social care cap fares in future. For most retirees, accumulating huge sum of social care cost will be a challenge. But, certainly, it’s not end of the road for them, as equity release can help retirees recover from challenges and to pay up the care cost.
House of Lords committee suggests equity release as effective retirement solution
A House of Lords committee had a few weeks earlier, recommended equity release as an effective solution to sort out poverty issue from the life of pensioners. This committee has also suggested government to chalk out strategies and spread awareness, about equity release, amongst the citizens of UK. (News source: http://goo.gl/cOMi4)
With several virtues, equity release scheme offers UK citizens to withdraw equity from their houses in cash lump sum or as monthly income. Unlike other mortgage plans, equity release customers can retain the ownership right and live in the house for entire life span.
Equity release offers countless benefits to customers, one of the most interesting and beneficial facets of this scheme is that paying back equity release mortgage, prior to your death or decision to move out from house, does not amount to any penalties.
It’s because of such time and means tested benefits that equity release has constantly been up on the minds of retired citizens in UK. Equity release market is functioning with all the new hopes, acquired from the last year’s huge success, to parity the income gains in the life of retired UK citizens.