Coronavirus: Martin Lewis advises on pension savings
Make the most of your money by signing up to our newsletter for FREE now
We use your sign-up to provide content in ways you’ve consented to and to improve our understanding of you. This may include adverts from us and 3rd parties based on our understanding. You can unsubscribe at any time. More info
Pension saving can often be a challenging endeavour which people undertake years before they are actually set to retire. Through workplace pensions and other arrangements, Britons hope to be able to build up a significant sum to allow them to leave the workforce. As such, one of the major concerns many express is whether they will have enough for their retirement.
Many will plough additional sums into their pension pot to ensure they are covered, but for some this option may not seem possible.
However, there is an alternative which is being posited as a choice for Britons in the current climate.
Property prices, it has been shown, have hit a record high for the fourth consecutive month across the UK.
The average asking price of a home in the country is now set at £338,448.
Pension update as Britons may be sitting on ‘healthy nest egg’ – how to boost your income (Image: Getty)
Many people who are planning towards their retirement will already be homeowners, and experts have suggested this could provide significant assistance.
Britons could take the step, it has been put forward, of releasing equity within their home to provide them with an additional source of income.
Equity release allows people to maintain their standard use of their home, while also obtaining either a lump sum or steady stream of income through the value of the property.
But it is worth noting that this must be repaid at a later stage, sometimes when a person passes away.
Furlough warning as Britons may struggle with mortgage payments [EXCLUSIVE]
IR35: Britons warned of tax ‘minefield’ with new changes – check now [ANALYSIS]
Martin Lewis explains how to secure a mortgage in later life [INSIGHT]
SunLife has pointed out that people over 55 may be able to release up to 60 percent of their home’s equity.
While this is dependent on a person’s circumstances, it could prove particularly lucrative.
Analysis house prices, it is estimated someone could enjoy an extra £13,213.80 compared to how much they could have released two years ago.
This money could then be added into a person’s pension pot for their retirement income.
Pension: Monthly sum needed for a £100k pot (Image: EXPRESS)
Ian Atkinson, marketing director at SunLife, commented on the matter.
He said: “If you are over 55, equity release is a way to access some of the money tied up in the value of your home.
“The money can be paid to you in instalments or in a lump sum and can prove useful to fund retirement, pay off a mortgage or supplement smaller pensions.
“The amount you can take out is different for everyone.
What is happening where you live? Find out by adding your postcode or visit InYourArea
“It depends on factors like the value of your home and your age.
“The good news is that with increasing house values, many people could find themselves sitting on a healthy nest egg, should they need it.”
Those who are interested in this option, however, are encouraged to think carefully about whether it is suitable for them.
Making use of equity release calculators as well as specialist advisers are likely to help Britons who are considering embarking upon this journey.