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As Retirement Incomes are Squeezed, Conversations About Housing Equity Increase in Importance says Air

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As Retirement Incomes are Squeezed, Conversations About Housing Equity Increase in Importance says Air</strong>

February 2023 – With nearly one in ten people who planned to retire having to delay their plans due to the cost-of-living crisis1, Air is calling on advisers to ensure they are discussing the uses of housing equity as part of the retirement planning discussion.

Since the end to the Default Retirement Age in 2011, we’ve seen a steady increase in the number of older employees with ONS data suggesting that there are 1.4m over-65s in full-time employment.2  While this is good news for the Government who is keen to encourage those who retired early during the pandemic or have not found the right role after furlough to return to the work force, this is not a viable possibility for everyone. 

Indeed, some people will find this difficult due to challenges such as ill-health or caring responsibilities.  Air is concerned that with Pensions & Lifetime Savings Association data showing that that retirees hoping to achieve a basic standard of living in retirement will need to increase their expenditure by 18% year on year due to inflationary pressures 3, some people will be forced back into work.

Stuart Wilson, Air Club Chairman, commented:

“Since the end of the Default Retirement Age, we’ve seen an increasing number of people work into retirement and there are now over a million over-65s working full time.  While some people want to work, other will delay retirement or return to a job that they may struggle with as the rising cost of living has put a real strain on their finances.

“For a significant proportion of people, their home is their largest asset and advisers should be discussing the role that housing equity can play.  We have the tools and the specialist knowledge to help this age group borrow flexibly and responsibly, it’s just a case of raising awareness amongst consumers. 

“The FCA Consumer Duty has made it clear that good consumer outcomes will be the focus of the IFA sector in coming years, so more firms need to consider whether they can provide this advice themselves or set up a referral relationship with a trusted partner to support this need.”

Notes to editors

AJ Bell Analysis for This is Money, Older people forced to delay retirement or go back to work as cost-of-living crisis leaves thousands facing ‘painful’ pension decision – click here

Data on over 65s in work and the average weekly earnings in the UK between April-July 2022 have been sourced from the ONS Employment & Labour Market Update, 13th September 2022 – click here

Pensions and Lifetime Savings Association – Retirement Living Standards Updated – January 2023 – click here

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