New pensions may lead more to release equity

Posted in General

20th April 2010

Millions may need to look towards equity release for extra funds in later life, if they are deterred by the government’s new pension scheme.

The Confederation of British Industry (CBI) warns that many employees may be put off by the high initial payments of the National Employment Savings Trust (NEST) and opt out, potentially leaving them with a smaller pension pot.

Whilst NEST ultimately provides more money in retirement, the CBI points out that savers will be worse off for over a decade once they start paying into the scheme.

Homeowners may prefer to release equity from their house as a means of providing more money during their retirement. Unlike downsizing, equity release schemes allow you to stay in your home and local community.

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