Recession could lead to more equity release

Posted in General

12th April 2010

Pension contributions have dropped due to the recession, which could threaten peoples’ financial freedom in retirement.

The new figures from the Office for National Statistics (ONS) show that the amount that employers and employees have paid in has gone down for the first time since records began in 1995.

To counteract this drop, people may wish to release equity in their home. Doing so could liberate a regular additional income in later life to make up the difference.

Alternatively, they could take the cash as a lump sum to treat themselves to a one-off purchase like a holiday or car.

The ONS figures show that contributions to non-state pensions dropped by £4bn, driven by a decrease in employer contributions to funded pension schemes.

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