Cost of Living Squeeze Hits Over 60s
Cost of living pressures are forcing nearly one in three over-60s to make major sacrifices to their lifestyles including turning down the heating and eating less, new research1 by over-60s property experts Homewise shows.
Its study found 29% of over-60s admit to cutbacks in spending and measures such as borrowing from family and friends and selling possessions because they do not have enough money to live off.
Around 12% say they cannot afford to heat their homes when they need to while up to 10% are eating less to have enough money to get by. Around 15% say they have sold possessions as they do not have enough money to live on.
The research underlines the growing financial pressures on people in the run up to retirement and highlights the struggle for millions despite the rise in average pensioner incomes.
Government figures2 show average pensioner household incomes after tax and housing costs are around £297 a week and that pensioner household incomes have increased by around 19% over the past decade.
But Homewise’s study shows around 600,000 over-60s (the equivalent of 7%) have less than £50 a week in spare cash while millions of others have to make major sacrifices.
Through its Home for Life Plan, which enables over-60s to buy homes at discounts of up to 59%, Homewise is aiming to revolutionise the way people approach retirement, avoiding being stuck in unsuitable housing with unmanageable repayments and instead allow them to retire happy.
Mark Neal, Managing Director at Homewise, said: “The rise in average pensioner incomes is very welcome but it does not tell the whole story and the sacrifices that many have to make in order to get by.
“Far too many people in retirement are stuck in debt, living in unsuitable housing and having to scrimp and save.
“We believe that the Home for Life Plan can help by enabling over-60s to move to a new home under a lifetime lease and release money to not only clear any debts but also allow those in retirement to live happily.”
The Home for Life Plan is a lifetime lease where those aged 60 or above can select a property to buy which is then purchased by Homewise at the full price. Customers will then buy a lifetime lease from Homewise typically at a discount rate of around 33%.
Legally, they are the lifetime owner of the property and can do as they wish – paint, wallpaper or put in a new kitchen. When that person dies the property will revert to Homewise but he or she can choose to leave an inheritance of up to 50% of the future of value of the home.