A wake-up call
Adviser “Hello, how can I help”
Client “I'm 60 years old and really want to start slowing down. I'd like to go part time if possible, but can't afford to. Is there a way I can release equity from my home to supplement my income until I can draw my pension?”
As an equity release adviser, I'm very familiar with this type of enquiry thanks to the moving goalpost that is the State Pension Age.
If you're one of the millions of people in the UK already affected by these changes, how prepared are you for your retirement? If you're at the younger end of the spectrum, how confident are you that you'll be able to access the state pension when you need it, if at all?
It's important to start preparing for your retirement as soon as you start working, but how are you supposed to do this when you're saving hard for deposit for your first home?
The average age of a first time buyer has risen to 33, with higher rental costs, property prices rising much faster than wages and the minimum deposit required by lenders all having an impact on our ability to get on the ladder. Of course we don't help ourselves either, succumbing to a lifestyle of instant gratification, fuelled by easily available credit to add to the huge student debt taken on to access the education needed for the jobs required to fund the lifestyle we want - a vicious circle?
For those lucky enough to have spare funds at the end of each month, the question then comes, what to do with it. With Final Salary Pension Schemes a thing of the past and traditional savings rates at an all time low, the only alternative seems to be to accept a level of risk to build up a meaningful nest egg.
By and large, the workplace is a much less physically demanding place than it was a generation ago, thanks to the rise in technology. But this also means we've never been more accessible and with the ability to be permanently 'on call', our home and work lives start to merge and it becomes harder and harder to switch off - Is this perpetual stress and pressure really what we want when we're hitting 60?
For some, the answer will be 'yes'. That's fine and the workplace is actually a far better place thanks to age diversity - but it should be a choice and there should be alternatives for those who feel they've 'done their shift' How liberating would it be to have the financial freedom to choose different, more fulfilling work, or to choose not to work at all?
With the help of a financial professional, there are things you can consider to give yourself a fighting chance of improving your options in retirement.
If you still have a mortgage, could you get a lower rate, using the savings to fund overpayments to clear your mortgage and other debts as quickly as possible?
Have you optimised your pension and other tax efficient savings?
If you're over 55, have you considered speaking to an Equity Release Adviser to discuss your options?
It’s easy to think that there's always time, but what about when your energy and enthusiasm for putting in 60 hour work weeks runs out 10 years before the end of your mortgage term - Start planning now!