WEALTH & RICHES THE BEST YOU
PENSIONS TIME BOMB
CL A TICKING OCK ON THE N
ew research shows that
many people are either feeling squeezed by
today's economic situation or they simply aren't engaging with the fact that they have a tomorrow to consider. The big question is, are you laying down provision for your retirement?In a recent survey in the UK, the Equity Release Council, the trade body providing consumer information and safeguards regarding the equity release industry found 65 per cent of people were struggling to save for their retirement, while only 16 per cent showed signs of being "savvy and sorted". Recent data published by
the Office for National Statistic showed that while 76 per cent of UK households currently save into a pension, the amount of savings needed to fund a regular retirement income has grown substantially since December 2009.
A crisis is going on. It isn't happening right now, but is due to happen in the coming years. The Best You investigates the pensions time bomb
ABOVE
Start saving now so that you can be comfortable in your autumn years
In 2013, a savings pot £458,000 is needed to receive an annual retirement income of £15,000 - 29% more for men than was needed in 2009 when the savings targets was £354,100, and 14% more for women in the same year when they £400,600.
Many also see their homes as a potential financial asset, intending to downsize and release equity. This is where the current economic problems have also caused problems. With the current stagnation in house prices in the UK, those who bought interest-only mortgages expecting their house price to far outstrip the initial sum paid for the house and thus being able to profit on the difference at sale are seeing no growth in their purchase. Essentially in the same position as those renting, a million
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people in the UK now find that they will have a shortfall of an average £71,000 when it comes to paying off the lump sum. These mortgages were popular in the 1990s when they were sold alongside endowment mortgages and popular again in the 2000s when homeowners essentially bet on the value of their homes rising continuously. Described as "mortgage timebomb" by the BBC, the problem has been recognised by the FCAm the Financial Conduct Authority. In the US among single
people, the figures are even more stark. In 2008 the average married household saved nearly 10 times more as they entered retirement than the median single-person household, $111,600 vs. $12,500.
That's why in the US
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