Over a fifth – 22% – of retirees surveyed were already reducing or stopping spending on medications and 15% were skipping meals due to their financial situation, according to data from Senior Capital, which surveyed around 2,070 respondents.
The figures also showed that 11% of British retirees have no savings at all, and almost one in five retirees across the UK will be on the poverty line as they do not have sufficient money in their pension pots.
One in seven said that the largest strain on their mental health was worrying about funding their retirement.
Prime Minister Rishi Sunak recently pledged that, if the Conservative Party is elected, he would introduce a tax-free pension allowance through a triple lock plus, which would save pensioners £275 by 2030.
Equity release could help
Senior Capital has said that, while the pledge is promising for pensioners, equity release could be a better way to help pensioners access capital to fund their retirement.
Rudy Khaitan, Senior Capital’s managing partner, said: “There is a growing need for new products that offer greater flexibility and choice, particularly in the relatively under-served later life lending market.
“For pensioners or anyone planning for their retirement, loan to value [LTV] is a critical component when assessing your quality of life during your later years, so it’s vital to investigate a multitude of options that can help ease your financial obligations, as remortgaging may not always be the right option.”
He added: “The right equity release mortgage product, particularly those that offer the greatest flexibility through limited prepayment penalties, can be the better option versus a more traditional mortgage when you want to unlock the value in your home without taking on additional monthly repayments.
“It allows homeowners to access the equity built up in their property, providing a tax-free lump sum to supplement regular income, whilst still retaining ownership and the right to live in their home for life or until they move into long-term care. This can be particularly advantageous for those who are retired or have limited income, as it offers financial flexibility and stability without the burden of servicing higher mortgage repayments.”
In March, a study by the Equity Release Council (ERC) found that a fifth of people do not expect to retire mortgage-free.
