RETIREMENT NEEDN’T BE AN EXPENSIVE BUSINESS

Unlock property cash to enjoy life more

MOST people look forward to escaping the daily grind and a wellearned retirement.

But the downside of giving up work is surviving on a reduced income.

It’s worth planning ahead to consider whether you can survive on the state pension.

Leading over-55s financial specialists Key Retirement’s analysis reveals the cost of being a pensioner adds up to an average of nearly £11,000 a year in the UK and nearly £10,000 a year in Scotland, or about £200 a week – almost a third more than the state pension.

It’s no wonder more and more Scots retired homeowners are releasing their property wealth to allow them to enjoy life in comfort.

Equity release – also known as a lifetime mortgage – is a way of borrowing money against the value of your home that doesn’t have to be paid back during your lifetime or until you go into long term care.

Key found that the cost mounts up from spending on basics such as food, clothes and bills.

The average retired household spends about 14 per cent of their cash on housing and fuel – that’s around £1500 a year – roughly the same as what is spent on food and non-alcoholic drinks, the equivalent to almost £1560.

Transport, including the cost of running a car, eats up 11 per cent of their annual spending – some £1200 a year.

Any spare cash is used for entertainment and eating out with about £1600 a year of their budget going on leisure spending.

Anyone who relies only on the state pension may face a significant shortfall.

Key’s data shows retired Scottish homeowners have on average £49,000 available to release from their homes.

Dean Mirfin, technical director at keyretirement. com, said: “The basic cost of being a pensioner demonstrates the importance of saving for retirement and generating income on top of state pensions.

“Over-65s own property worth more than £1trillion and are sitting on spare cash that can be used tax-free to boost their income, particularly when inflation is rising and interest rates remain at historic lows.”