LV= says despite this more than two thirds (68%) have untapped property wealth which they may not have even considered or don’t realise they could utilise to improve their income in.
The report found that two in five of those aged 65 and over (42%) – 4.8 million pensioners – have ‘gone without’ due to tight budgets. These pensioners sacrifice items such as holidays abroad (25%), a new car (16%) or dining out (15%), and one in 20 (5%) can’t afford to buy birthday and Christmas presents for friends and family.
Regionally, retirees in the South West and East of England are most likely to go without, with those in Wales (5%) and Scotland (5%) most likely find it a struggle to keep up with their utility payments.
Of those retirees whose income is less than the equivalent of earning the minimum wage, the number 'going without' rises significantly (to 54%). One in seven (15%) can’t afford to replace household goods and over 150,000 are struggling with their utility bills.
LV=’s research shows that five in six (83%) over-65s own their home and are sitting on an average of £235,750 in property equity, which they could access to have a more comfortable retirement.
However, despite this, only one in 20 (7%) over-65s have used capital in their property to help fund their retirement.
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John Perks, managing director of retirement solutions at LV=, said: “It’s deeply concerning that so many older people are struggling in retirement, often going without life’s essentials but it doesn’t have to be this way. There are many options available and using untapped housing wealth to supplement other incomes is a route worth considering.
“It is unfortunate that misconceptions about the way retirees can use their property to plug an income shortfall persist.”
LV= is encouraging consumers to seek advice from professional advisers on equity release.
The National Minimum Wage is £6.50 an hour. According to ONS Annual Survey of Hours and Earnings (2014), the average full-time employee works 39.2 hours week. Therefore, minimum wage would be £254.80 a week, or £13,249.60 a year. LV= says its research suggests one in three over-65s receive less than this.
The research was carried out by Opinium Research from 27-29 July 2015. The total sample size was 2,042 British adults over 18 years old and was conducted online. Results are weighted to a nationally representative criteria.