Marguerite Taylor December 20, 2016 No Comments

UK House price inflation rising ten times faster than pensioner incomes

House prices in England have grown to almost 10 times the size of the average pensioner’s yearly income over the past 20 years, findings from the Equity Release Council reveal. Analysis of Office for National Statistics data between 1994/5 and 2014/5 showed that the average house price in England has rocketed by 148% from £82,100 to £203,360. Despite such gains, pensioner household income rose by just 66% in comparison to total £21,026 a year in 2014/15.

 

Events like the 2008/09 financial crisis have meant that growth in house prices relative to pensioner income has not been linear, the research showed. House prices in the mid-2000s were almost 12 times higher than the average pensioner income, before narrowing to 9.4 times in the aftermath of crisis.

 

Nigel Waterson, chairman of the Equity Release Council, said the findings had “game-changing” implications for the use of housing equity to fund their retirement.

 

“While the growth in house prices has not been linear or universal, strong market fundamentals mean housing equity is likely to remain a sizeable asset for the foreseeable future. It means housing wealth has an indispensable part to play in all discussions home owners have about financial well being in retirement,” he said.

 

“Government must act to encourage people to think through their options holistically, rather than focusing exclusively on savings and overlooking other choices that could boost their prospective retirement income.”
House prices have also outpaced the growth of pensioner investment income which has fallen 20% over a 20-year period, state pension income which has risen 59% and income from private pensions/annuities which has recorded growth of 114%.

 

Waterson added that the significant growth in house prices meant many pensioners who own their home have been effectively investing in an asset which could boost their income for later life.
He said: “With economic turbulence affecting investment returns and putting government finances under added pressure, housing equity is likely to be an increasingly important source of income for pensioners for years to come.”

Marguerite Taylor November 18, 2016 No Comments

Reverse Mortgage to Supplement Low Super for Women?


Recent data from Roy Morgan Research reveals that the gender gap between male and female retirement savings is gradually closing. In 2008, the retirement savings of women amounted to 57.7% of the male average, while in 2016 the figure increased to 63%. While this is a remarkable progress, the average superannuation of women may not be enough to sustain a decent lifestyle during retirement.

According to the Workplace Gender Equality Agency (WGEA), there are range of factors contributing to the gender gap in superannuation including:

  • Tax arrangements that benefit higher-paid men
  • Gender pay gap
  • The fact that women take more time off from work to take care of children
  • The fact that women are more likely to work part time

WGEA further reports that the superannuation contribution gap is further compounded by women working part-time (3 out of 4 part-time employees are women) and takes extended periods out of the workforce caring for children and other family members. Hence, more women end up with lower retirement savings.

Australian Women Live Longer then Struggle with their Finances

According to a report released by the Council of Australian Government (COAG) Reform Council, women are generally healthier than men but experience difficulty with their finances, because they less likely to participate in paid work and as we have mentioned above have less superannuation when they retire.

The report also notes that older women (60 years old above) tend to need help with daily activities like household chores and transport. However, almost 30% of senior women report unmet need for help.

By 2050, the number of people aged 65 in Australia will nearly double and those aged over 84 will increase four times. Majority of this population will be women. Senior women don’t necessarily experience difficulty compared to older men, or the other way around, but they have different circumstances. And these unique challenges need innovative solutions like reverse mortgage.

Reverse Mortgage Can Help Women In Retirement

We at RMFS find it unacceptable that Australian senior women have to live with meagre superannuation. That’s why we help our customers, particularly women, to evaluate their finances and find suitable products and services to help them with retirement.

Many senior women have worked hard for years and have already paid off their mortgage. As a matter of fact, working women usually prioritise paying off mortgage first before saving for their retirement. Hence, much of their equity are locked within their homes.

Our reverse mortgage lenders can unlock this equity, so you can use a portion of your wealth to finance your needs during retirement. You can use the loan proceeds in anyway you want such as additional income, debt consolidation, financing aged care, upgrading of home, even purchasing car or paying for holiday.

The best thing about reverse mortgage is that you don’t have to move out from your home, so you can enjoy your residence during your retirement.

To know more about how you can use a reverse mortgage loan, you can call Reverse Mortgage Finance Solutions at 1800 001 020. You can schedule an appointment with our loan experts who will go the extra mile by visiting you at your home.

Regards, Marguerite