Equity release will provide the solution for a deficit in retirement saving, according to some Brits who have not yet started putting money aside for when they retire.
According to the latest Home & Capital Advisers' retirement planning survey, almost 40 per cent of UK adults admit to not preparing for retirement yet, of which, 28 per cent have no intention of doing so, while the remainder will not start saving until they are 39, on average.
Home & Capital believe that leaving it until the age of 39 to start saving for retirement is 'much too late'.
One in six Brits expect to have an annual income of less than £5,000 a year in retirement – approximately half of what they expect to need for a comfortable life – and, consequently, 28 per cent expect to continue working past retirement age to subsidise their income.
Among those aged 30 or younger, retirement plans are not a priority, with 54 per cent saying that they have thus far taken no action to prepare for their retirement, or are relying on their parents for an inheritance.
Of those who are not currently making financial provisions, 54 per cent said they cannot afford it, 14 per cent said they are living in the moment and have not considered their retirement, 13 per cent believe they are wealthy enough not to worry about it, while 11 per cent are relying on the value locked up in their property.
Nearly half of Britons are relying on the Government to fund their retirement, which Home & Capital believes is placing 'undue reliance' on the current system. Meanwhile, 41 per cent believe it is the responsibility of the individual, three per cent think the EU should provide for the, and a further twp per cent expect their family to take care of them in their old age.
Nigel Hare-Scott, managing director of Home & Capital Advisers, a leading specialist in equity release, said: "We’re heading for an age crisis of monumental proportions – at both government and personal levels." He finds the fact that so many Brits are ill prepared for retirement "most worrying".
The view that the Government will provide for them is "misguiding", he added, as Britons are living longer while the proportion of people of working age is in decline – a combination which will overwhelm the system as it now stands.
"Individuals will be forced to meet the cost of retirement on their own or face poverty," Mr Hare-Scott warned.
"One in nine respondents said they will rely on the equity in their homes to support them in retirement. My view is that as pensions become less generous in the future, more people will need to use the value of their homes to generate cash or an income - after all, it is by far the most important investment for most individuals," he said.
Home & Capital is a founding member of the equity release trade body, SHIP (Safe Home Income Plans), which establishes standards for consumer protection in the equity release industry.
© Fair Investment Company Ltd
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