More people are coming to retirement and realising that they simply cannot afford to fund themselves for 20 or 30 years – for them the answer may lay in unlocking their home’s equity.

Retiring is becoming more expensive – the average retired household needs to find up to £429 extra a year to cover an increase in their cost of living, according to MGM Advantage.

It has found that the annual average household expenditure for a retiree is estimated is £23,106 and £14,926 where they are aged 75 and over. While a good pension may cover most of this it may not cover all of it, and it may not cover all of it after a long retirement.

Aston Goodey, sales and marketing director of MGM Advantage says: “Many retired people have had to endure a rise in their cost of living. This, coupled with the fact that people are generally living longer is placing considerable pressure on retirement income. All the more reason to seek financial advice to ensure you achieve the best possible income in retirement.”

By using some of the equity in your home through equity release, you can add to your pension pot and you can cover shortfalls during retirement. You do not have to use all of your equity and it needn’t cost you a lot to take on the responsibility but it will aid your retirement and make your finances work during your final years.

SOURCE: MGM Advantage, 13/01/10

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