Equity release could 'boost annual incomes' as pension funds fall £2.9billion, says Prudential

16 March 2009 / by Rebecca Sargent

Pensioners retiring in 2009 are expecting a shortfall of £2.9billion compared to 2008, research from Prudential has revealed, but drawing on assets such as property could boost annual incomes.

The study has found that as the recession continues, 3.25 million UK adults who plan to retire this year are expecting to receive £2.87billion less than if they had retired last year.

Individually, the figures show that UK workers planning to draw their pensions this year will receive an average of £17,779 a year, which is £884 less than the £18,663 they would have got last year.

And, as conditions worsen, the survey found that 61 per cent of respondents are doubtful that they will have enough money to enjoy a comfortable retirement as they fear their pension and savings will not be sufficient.

Commenting, Heith Haggart, director of lifetime mortgages at Prudential said: "Although the results of our survey make unsettling reading, there are ways for pensioners to maximise their incomes during these difficult times.

"Drawing on some or all of the assets saved throughout their working lives, including releasing value from property through equity release schemes, can boost annual incomes without having a detrimental impact on quality of life or forcing pensioners to downsize or embark on a fire sale of their possessions and assets."

Advice is also key when it comes to retirement, Mr Haggart added: "Rather than struggle through what should be some of the best years of their lives, anyone approaching retirement who has recently retired should talk to a financial adviser who can help them review all their assets and savings to see how they could be used to maximise income."

Get equity release quotes and advice »

Get retirement planning advice »

© Fair Investment Company Ltd