Currently, women need to have worked 39 years to clock up enough National Insurance contributions to be entitled to the full state pension and men for 44 years. However, a change in the rules on 6 April this year will see both dropped to 30 years.

On the face of it, the Government’s attempt to make the full state pension more accessible, particularly to women who may have taken time out of their careers to raise a family or care for an elderly relative, looks positive. However, it will have connotations for the 110,000 women who are set to turn 60 before 6 April having worked between 30 and 39 years: connotations in the region of £20,000 which could they could lose out on if they live to the average life expectancy age of 81; just because they were born on the wrong date.

Women born just one day apart facing significant financial differences

Women turning 60 before April 6 this year will receive only 75% of the state pension if they have less then 39 years of NI contributions under their belts, unless they have paid extra to top them up. However, those turning 60 on or after April 6 will only need to have worked 30 years to receive the full entitlement, which means women born just one day apart could face significant financial differences in the long term.

The changes may also affect men, although it is less likely they would have taken the same career breaks as women so most would have met the necessary years of contributions.

Changes should have been phased in

Whilst the changes are welcomed, LibDem Work and Pensions spokesperson Steve Webb suggested they should have been phased in. He said, “The changes are entirely welcome and long overdue but they create a ‘cliff-edge’ for those who reach pension age immediately beforehand. Many could lose out on £10,000 over ten years simply for being born a few days too early. Big changes like this should be phased in.”

Top up options for those living on 75% pensions

By 2025, it is estimated that 90% of all women will qualify for the full pension. But what of those reaching retirement age now and losing out because of a date of birth lottery? The State Pension barely meets the financial needs of the retired as it is so for those who did not pay to top up their NI contributions and face life on just 75% of the State Pension, pension top up options will need to be considered.

One of these options for homeowners is Equity Release through a SHIP (Safe Home Income Plan) Lifetime Mortgage or Home Reversion Plan. Geoff Charles of Equity Release Specialists Bower Retirement Services, says: “With these types of mortgages or plans, cash can be released from the equity in a home without fear of losing that home or owing more than its value.”

‘Drawdown plans’ within Lifetime Mortgages and Home Reversion Plans can be used to top up income and savings as needed. Geoff Charles says: “Lifetime Mortgages have the added flexibility of monthly repayments or for those for whom reducing monthly expenditure is important, no monthly repayments.”

Equity release may involve a lifetime mortgage or home reversion plan. To understand the features and risks, please ask for a personalised illustration.

Bower Retirement Services is an FSA regulated independent financial advice company that offers specialist advice on equity release throughout the south of England. For more information e-mail info@brsequity.co.uk or call 0800 4118668. Bower Retirement Services offers a no obligation initial consultation to homeowners considering Equity Release.

UK foreign exchange experts Moneycorp have recently reported that 70% of Brits who moved to mainland Europe are now considering coming home because as the value of the Pound has plunged, so has their ability to afford mortgage payments and general living costs. Some 74% of those ex-pats living in Spain alone intend to return to the UK, according to the survey.

Sterling Plunged in Value

Sterling has dropped around 30% in value against the Euro over the past three years and, according to Vince Robinson of UK based removals company removalstofrance.com, it has been mainly retired couples making the move back because they have seen their pensions plummet by more than 30% as a result of the exchange rate drop. Not only this, those living on their life savings face the nightmare of plummeting interest rates.

As well as financial concerns, older ex-pats face the worry of an increased need for medical care, which in some cases doesn’t match the quality provided in the UK: another reason to move back home.

Funding a move back to the UK

But what lies ahead for those retirees who have no choice but to make the move home and who sold their UK property to fund their move to the sun? How will they meet the purchase price of a new property in the UK if it is higher in value than the property they are selling? Or gather the cash they need to fund the move and pay for things like removal costs and legal fees?

Geoff Charles, Managing Director of Equity Release Specialists Bower Retirement Services suggests releasing cash from the new property in the UK as a possible consideration. He says “Retired ex-pats moving back to the UK can use equity release to fund the purchase of their new property and/or moving costs, and they will have a lifetime guarantee of residence.”  

The lifetime assurance that the homeowner will never have to move out of the property comes courtesy of the SHIP (Safe Home Income Plans) guarantee. 

Geoff Charles summarises by saying, “We help lots of retirees fund a home move or upgrade to a more expensive property – whether they are returning from another country or simply moving within the UK – by arranging for them to receive a lump sum to be used as a deposit and/or for moving costs which has no monthly repayments and is therefore not based on income or credit rating.”

Equity release may involve a lifetime mortgage or home reversion plan. To understand the features and risks, please ask for a personalised illustration. 

Bower Retirement Services is an FSA regulated independent financial advice company that offers specialist advice on equity release throughout the south of England. For more information e-mail info@brsequity.co.uk or call 0800 4118668. Bower Retirement Services offers a no obligation initial consultation to homeowners considering Equity Release.

Angela, previously an IFA specialising in Equity Release and Long Term Care and before that a Cheltenham and Gloucester Bank Manager, is ardent about Equity Release and the good that it does.

In joining the Essex based company – winners of the Best Financial Adviser title at the Equity Release Awards 2009 – Angela will focus on providing fellow industry professionals with information on the range of flexible products offered by the regulated equity release market: products that offer valuable help with retirement funding.

Angela says: “I am delighted to join Bower Retirement Services; as someone who is fervent about equity release, I naturally had a desire to work for a company that shared my enthusiasm for it and how it can make a difference to the lives of those in retirement. It became apparent very quickly that joining a company like Bower; one so committed to delivering such a high level of advice and service; would be a fulfilling decision.”

The Bower Retirement Services team has been steadily expanding for some time. Managing Director Geoff Charles welcomes Angela to the company, saying: “I am delighted to have Angela on board; she completely shares our dedication to complete client care, moral and ethical advice and depth of knowledge, and is looking to share this with like minded professionals, for the benefit of all of our clients.”

Bower Retirement Services is an FSA regulated independent financial advice company that offers specialist advice on equity release throughout the south of England. For more information e-mail info@brsequity.co.uk or call 0800 4118668. Bower Retirement Services offers a no obligation initial consultation to homeowners considering Equity Release.

This figure has dropped by 11% on that produced by the same survey last year, whilst the figure for men has only dropped by 3%. 

The reason put forward is that many women did not contribute to a pension fund during the years in which they stayed off work to raise children and also because at present, the compulsory retirement age for women is 60 meaning they have five years less than men to accumulate a pension pot.

Prudential’s advice to women was to ‘try to keep paying private pension contributions and National Insurance for their state pension during career breaks while they bring up children’.

Geoff Charles, Managing Director of Bower Retirement Services, says that this news could spell difficulties for women who lose their husbands and find themselves without the benefit of their partner’s income to live on. He suggests that those who own property could use it to help top up or supplement their income and says: “Property owners could use an income release or drawdown facility via a lifetime mortgage to boost their finances in retirement.”

Equity release may involve a lifetime mortgage or home reversion plan. To understand the features and risks, please ask for a personalised illustration.

Bower Retirement Services is an FSA regulated independent financial advice company that offers specialist advice on equity release throughout the south of England. For more information e-mail info@brsequity.co.uk or call 0800 4118668. Bower Retirement Services offers a no obligation initial consultation to homeowners considering Equity Release.

A report by Aviva found that 25% of ‘pre-retirees’ – those aged between 55 and 64 – have a mortgage and in 20% of those cases it exceeds £75,000. The report, which came from a study of over 1200 people, stated that 40% of pre-retirees have average savings of only £8,600, excluding pensions, and that this sum could easily be swallowed up should a household emergency occur.

In Denial about Retirement Funding

Further, countless pre-retirees have been living in a state of denial about how they will survive when they retire and many don’t even give their pension statements a second glance before rendering them to the filing cabinet, instead believing their property will act as a ‘cash machine’ when they finish working and that by downsizing to a smaller home they will be able to create a retirement fund.

However, pension experts warn against relying on this widely held approach of using a property as a pension because when it comes to it, few people at retirement age will actually want to move out of the property that they have called home for many years.

Most Retirees won’t want to Downsize

Geoff Charles, Managing Director of award winning equity release specialists Bower Retirement Services, agrees that most people at retirement age will not wish to move home and suggests regulated lifetime mortgages or home reversion plans as alternatives, although is keen to point out that relying on your main residence as the chief means of retirement funding is not a good idea.

Releasing equity through a regulated lifetime mortgage or home reversion plan can allow homeowners aged 55 plus to pay off debts, can provide a monthly income and can fund retirement aspirations whilst guaranteeing staying in the home; so no need to move unlike with downsizing. It is important to note that the guarantee of staying in the property and also that of never owing more than its value is only provided by plans endorsed by the organisation Safe Home Income Plans (SHIP) whose members abide by their code of practice.

Geoff Charles says, “For those reaching, or in retirement, with insufficient savings or income, but with equity in their property, regulated equity release through lifetime mortgages and home reversion plans could help fund their retirement by supplementing other sources of income or savings.”

Equity release may involve a lifetime mortgage or home reversion plan. To understand the features and risks, please ask for a personalised illustration.

Bower Retirement Services is an FSA regulated independent financial advice company that offers specialist advice on equity release throughout the south of England. For more information e-mail info@brsequity.co.uk or call 0800 4118668. Bower Retirement Services offers a no obligation initial consultation to homeowners considering Equity Release.

This year’s retirees could be in for a shock however, as many of those surveyed were unaware of the value of the basic state pension. 31% either did not know what they would get, or overestimated the amount by around £25 per week.

Currently the basic state pension is worth £95.25 per week to a single retiree and £152.30 to married couples. However, figures from the Office for National Statistics show that on average, households headed by a 65 to 74 year old will spend £321.00 per week.

Prudential’s Director of Defined Contribution Solutions, Martyn Bogira, said: “If the basic state pension is your only source of income you could be in an extremely precarious position financially. Just one significant financial emergency, like your central heating system unexpectedly breaking down, could cause serious financial hardship for people expecting to retire on the state pension alone.”

For people planning to retire this year, the research showed that the state pension will make up 34% of their income. Just 9% of income will come from personal pensions, 11% from savings and investments and 36% from company pension schemes. Part time jobs will account for 6% and equity release 1%.

Equity Release

Geoff Charles of award winning Equity Release specialists Bower Retirement Services believes that in the future, equity release will make up a higher percentage of retirement funding aspirations; clearing debts to increase disposable income and supplementing retirement income or savings.

He says, “With final salary pensions now less common; and money purchase pension schemes becoming more common, we now have the specter of unknown private pension maturity amounts. These amounts will be dependent upon the total contributions and prevailing annuity rates on encashment and are often not as high as final salary pensions. Therefore with the added problem of so little being earned from savings and investments at this time, I’m of the opinion that equity release will be increasingly used to make up retirement income through drawdown and regular cash release products.” 

Bower Retirement Services is an FSA regulated independent financial advice company that offers specialist advice on equity release throughout the south of England. For more information e-mail info@brsequity.co.uk or call 0800 4118668. Bower Retirement Services offers a no obligation initial consultation to homeowners considering Equity Release.

LV says that some 12% of over 50s have opted to save less for their retirement; banking on the value of their home continuing to rise so that they can cash in on the profit.

Vanessa Owen of LV said in a statement that proves there is confidence in the value of equity release: “In a matter of months millions of pre-retirees have seen both their property and pension fund values battered. Despite this, their confidence in the long-term value of bricks and mortar remains.”

Equity release is steadily growing in popularity as a retirement solution and many pensioners are sitting on large amounts of property cash that they could safely release to help fund a more enjoyable lifestyle.

Geoff Charles of award winning Equity Release Specialists Bower Retirement Services agrees with the findings of the LV research, saying “Releasing cash from a property is becoming an increasingly popular way of helping homeowners fund their retirement.”

Bower Retirement Services is an FSA regulated independent financial advice company that offers specialist advice on equity release throughout the south of England. For more information e-mail info@brsequity.co.uk or call 0800 4118668. Bower Retirement Services offers a free, no obligation initial consultation to homeowners considering Equity Release.

One of the worst hit groups is pensioners who are struggling to cope on their poor retirement incomes. Even though a rise in the State Pension is on the cards for this forthcoming April, this is of little comfort to those who are struggling to make ends meet thanks to the VAT rise, increases in fuel bills, grant cuts and abysmally low interest rates.

However, in many cases, homeowners could well put an end to the tougher times, have more money to spend on everyday expenses and even be able to splash out on regular holidays.

Geoff Charles, Managing Director of Bower Retirement Services has this to say: “So much of the retired population is sitting on enough money to be able to enjoy a far better quality of life. By releasing some of the value they have built up in their properties over the years, it’s like cashing in on an investment: the investment they’ve made by paying into their property.”

Equity release involves releasing cash from a home. This cash can be taken as a cash lump sum and /or a regular payment and allows homeowners to enjoy and indulge in things like regular or luxury holidays. Geoff Charles of award winning Equity Release Specialists Bower Retirement Services says, “Many older people have friends or relatives that have moved abroad and a lot of our clients have grandchildren that they’ve never even met because they live so far away. Equity release allows them to access the cash they need to take the trips they’ve always dreamed of so that they can spend quality time with their friends and family.”

Bower Retirement Services is an FSA regulated independent financial advice company that offers specialist advice on equity release throughout the south of England. For more information e-mail info@brsequity.co.uk or call 0800 4118668. Bower Retirement Services offers a free, no obligation initial consultation to homeowners considering Equity Release.

Bower Retirement Services are recent winners of Best Financial Adviser in the Equity Release Awards 2009 and founder members of SERA, the Society of Equity Release Advisers. The firm specialises only in equity release and delivers advice to a wide cross-section of customers who release cash from their homes for a variety of reasons.

LV= (formerly Liverpool Victoria) uses the case studies to highlight not just the benefits of equity release to potential customers and their particular situations, but the benefits of taking a high level of in-depth, independent, specialist advice, to assist in achieving 100% customer satisfaction.

“We are delighted to be able to use clients of Bower Retirement Services as part of our case study programme and congratulate them on their success at the recent Equity Release Awards,” said Gwyn Airdrie, Head of Equity Release Sales at LV=.

The news, however, was not met with applause by charities such as Age Concern and Help the Aged who suggested that the substantial drop in retirement income over the past 12 months, low interest rates and the VAT increase on 1 January will counteract any rise.

But those who did see it as a positive initiative may wish to reconsider their verdict in light of the fact that the rise will not apply to SERPS and other similar pension top ups. Speaking to the BBC, Pensions Minister Angela Eagle said the rate had been frozen in these cases to prevent ‘confusion and unfairness’.

According to the Daily Telegraph, some 10 million pensioners will suffer financial problems due to the freeze, which applies to a number of pension top ups including SERPS (State Earnings Related Pension Scheme), small earnings related supplements and graduated pensions and will also affect the £7 per week payable to those who delay retirement until they are 60 years old and the £57 payment for men with wives under 60. 

Geoff Charles of Equity Release Specialists Bower Retirement Services says he isn’t surprised by the news and agrees with the opinion of the various charities who have made their voice known that it is a case of ‘give with one hand and take with the other’. “I still can’t see why the Government doesn’t adopt a common sense attitude and put some backing behind Equity Release,” he says and continues, “I am in no doubt that even more pensioners will be looking to fund their retirement by releasing value from their homes now.”

Combine this with the recent announcement that some 50% will be shaved off the Government’s Warm Front grants which are offered to pensioners and those on benefits to help them insulate their homes and modernise their  heating systems, and surely it’s a recipe for disaster?

The retired population already has enough to worry about with poorly performing pensions, low interest rates and the forthcoming VAT hike. Geoff Charles, Managing Director of Equity Release specialists Bower Retirement Services says that fuel poverty is a worrying reality and something needs to be done urgently to resolve the issues before the problem worsens. “Pensioners quite simply should not have to live in freezing cold homes or go without just so they can pay their fuel bills.”

The Which? survey of 825 adults in November 2009 stated that 73% of respondents said they would worry about how they would afford a 35% increase in energy bills, and 28% already worried about paying their bills.

Geoff Charles continues: “If the Government is going to reduce the much needed Warm Front grants they need to put some weight behind another initiative before these energy bills get out of control. I believe that initiative should be equity release, because it is a safe way for those who own their own homes which have increased in value over the years to release some of that value so they do not have to live in poverty. The money could be used to modernise the heating system and insulate the property and make other improvements such as new windows so that the home becomes energy efficient, and the fuel bills decrease.”

Warm Front offers grants usually up to £3500, although they can be as much as £6000 in some cases where renewable energy or low carbon initiatives are used. The grants are used to insulate the home and modernise heating systems so that energy bills are cut. Those over 60 claiming means tested benefits can apply, as can families with children under 16 and in some cases, those on disablement benefits.

Speaking on the BBC’s Money Box programme, Derek Lickorish, chairman of the Government’s Fuel Poverty Advisory Group said: “Instead of the 215,000 households assisted in this financial year it will be down to around 90,000 in the next. Those who have applied will see waiting times increase significantly and those who apply in future will be declined.”

“Government should put weight behind Equity Release”

The cuts could lead to vulnerable older people being unable to make vital, money saving improvements to their homes which could mean increased energy bills and as a result, a lower standard of living. Geoff Charles of award winning equity release specialists Bower Retirement Services says, “More Government cuts leading to even more chilling news for the retired population; yet the Government still doesn’t put weight behind one of the most obvious solutions that could see pensioners enjoying a far better standard of living: equity release.”