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Retirees having to rely on home comforts

Retirees having to rely on home comforts

Category: Annuities

Updated: 13/05/2011
First Published: 01/10/2010

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Workers over the age of 50 increasingly believe they will have to use the value in their homes to help fund their retirement.

New research from LV= found that almost a quarter of workers who have passed their half century are considering using some or all of the equity in their property to supplement their retirement income.

More than half of those surveyed said that an average of £21,706 had been wiped off the value of their homes over the past three years, while one in five said they had delayed their retirement for this very reason.

Yet such is the dire situation facing many prospective retirees, they feel they have little option but to utilise their homes to see them through their later years.

The wider economic problems mean many over-50s have suffered a double blow in recent years.

Not only have large amounts been wiped off the value of their pensions and investments, but they have also been forced to reduce the amount they are setting aside for retirement due to the pressures of living costs during the recession.

One in five over-50s have cut their savings by an average of £137 a month, meaning that many more in future may need to cash in on the value of their homes to make up for pension shortfalls.

All this means it is even more important that people make the very most of any pension pot they do manage to build up.

Many people could be missing out on increased income from their pension funds as they are unaware that they could qualify for an enhanced annuity.

Enhanced annuities provide bigger pensions for those with serious medical conditions or with negative lifestyle factors such as weight, smoking and occupation.

Recent figures suggested that between 55% and 65% of those retiring may have conditions that qualify them for an enhanced or impaired life annuity, but such products make up just 12% of all annuity sales.

There are more than 1,500 conditions that count towards an enhancement, such as high blood pressure or diabetes, but many people approaching retirement fail to realise that such ailments could mean a boost in retirement income.

The value of finding the right annuity was highlighted recently by research that found rates had fallen to an all time low.

Our annuity Best Buy tables reveal how the offerings from various annuity providers in the market compare, including names such as Saga and MGM Advantage.

We've also recently partnered up with Premier Retirement Services to provide you access to their online annuity planner service.

Choosing an annuity is likely to be one of the most important financial decisions you will ever make, so any time used researching the annuity market will most definitely be time well spent.

Find the best annuity for you - Compare annuities

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.