Responding to today’s updated Pensions and Lifetime Savings Association (PLSA) retirement living standards Jim Boyd, chief executive of the Equity Release Council, said:

“Spending longer in retirement might sound attractive, but living well in retirement is no guarantee. The PLSA figures reflect challenges older people face if they want to retire in comfort and the strain inflation is putting on pensioners’ incomes.

“A couple seeking a moderate lifestyle would have an annual shortfall of £16,320 between their retirement income and what they need. This increases to more than £32,000 for any couple seeking a comfortable lifestyle. The reality of 21^st century retirements is that savings, investments and private pensions are often not enough to make up the difference.

“With approximately £2.587* trillion of net housing wealth in homes owned by people aged 65 or over, we cannot afford to allow property wealth to be an afterthought in retirement planning conversations. A typical drawdown lifetime mortgage would help a retired couple bridge the gap to afford a moderate lifestyle for more than six years** but could be stretched for longer if they have more modest ambitions. Property wealth is no longer a nice-to-have or a last resort. For a whole generation of retirees it could make the difference between scrimping to survive or enjoying a degree of comfort.

“Over the last ten years, the equity release sector has added innovative products to the strong Council standards that exist to protect consumers’ interests. The next ten years must be about ensuring nobody overlooks lifetime and later life mortgage products in the pursuit of a more enjoyable retirement.”

ENDS

Notes to editors

* January 2024 – Data from Savills –  click here.

**Average new equity release drawdown customer, including initial lump sum and reserve, in Q4 was £103,160. £103,160/£7,220 (the expected shortfall for a couple with a moderate retirement) is 14.29 years