Nigel Waterson, chairman of the Equity Release Council, comments on the latest DWP data on workplace pension participation and savings trends:
“These figures paint a bleak picture of retirement income, cementing the view that people are still failing to put aside enough to ensure a comfortable living standard, with the number of employees participating in a pension scheme down by 7% over the last ten years.
“It is a welcome sign of progress that people are gaining more freedom to use their pensions savings how they wish, but the fact remains that many don’t have enough saved to begin with.
“The decline in the amount put aside (from £6,878 per saver in 2005 to £6,659 in 2013) suggests fewer people will be able to rely solely upon savings in retirement and reinforces the need for additional sources of income – especially as the cost of living increases and the average length of retirement soars.
“A significant boost to retirees’ income could come by tapping into housing wealth especially as rising house prices are increasing the amount of housing equity at people’s disposal.
“Many equity release customers choose only to use a small portion of their total housing wealth, ringfencing a substantial amount for inheritance even once the loan and interest is repaid. The market has grown significantly over recent years and there are many more who could benefit from equity release – particularly as mortgage lending regulations limit the options for older borrowers.”