Equity release could bridge debt gap

Higher taxes or national spending cuts of £20bn a year are crucial in the next three years according to consultancy firm PWC.

The firm says the Treasury's predictions for economic growth will leave a financial gap as they're too optimistic.

PWC claims that the economy will grow at 2.5 per cent a year rather than the 3.25 per cent projected by the Treasury.

And this is likely to put pressure on public spending "from 2011/12 onwards after a decade of relatively strong growth", according to John Hawksworth of PWC.

One way for people approaching retirement to take control and plug the gap for themselves is through equity release.

If higher taxes are introduced, this could produce a squeeze on household finances. Equity release schemes are a way to free up cash to provide for a comfortable retirement and make it possible to make home improvements.

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