Interest threatens comfortable retirement

Posted in General

8th April 2010

Low interest rates might be welcomed in the mortgage market, but people relying on savings to give them more financial freedom in older age are losing out.

Figures from the Office for National Statistics (ONS) show that in 2008, savers enjoyed interest worth £40bn, but last year this fell to £19.2bn, due to the low interest rates.

Pensioners looking for a more comfortable retirement may need to consider equity release as a replacement for the lack of interest they receive on their nest eggs.

They could release the equity from their homes in a lump sum to pay for a big one-off purchase, but they may prefer to take it as a regular additional income to supplement their pension.

That's especially true at the moment, when house prices are rising once again – increasing the value of the home equity held by property owners.

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