The Chancellor did not use this week's Budget to address one issue involving both the retirement and housing sectors which could help improve pensioners' lives, an expert has claimed: equity release.
The "principal and often sole assets of the elderly are their homes," says Nigel Hare-Scott, spokesperson for retirement experts Home & Capital, "so it is disappointing that one anomaly closely related to both the retirement and housing sectors remains ignored."
While Mr Hare-Scott welcomes the measures that Alistair Darling introduced in his Budget to help pensioners, such as raising the savings limit for pension credit and increasing the state pension despite negative RPI inflation, he thinks more could be done.
"A simple method of improving the sometimes desperate financial circumstances of retired homeowners would be to make cash releases under regulated equity release schemes outside the scope of income support and pension credit assessments," he said.
Mr Hare-Scott believes there are issues which the Chancellor could have addressed in order to encourage people to remain in their homes whilst improving their quality of life through equity release:
"As the home itself is excluded when assessing eligibility to pension credit, there is no logic for including savings which derive from, say, lifetime mortgages which are designed to enable pensioners to remain in the same home.
"Means testing on this basis discourages the elderly from improving their standard of living, an absurd consequence of a rigid interpretation of the rules. The Treasury have clearly not yet recognised that equity release
plans are an effective method of improving pension provision at negligible cost to the taxpayer."
Equity release is not appropriate for all circumstances, so get expert equity release advice to see if it's right for you.
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