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Equity release can be boon for elderly

A by-product of the credit crunch has been the effect of falling interest rates on pensioners’ income, primarily affecting savings and annuities.

With typical rates on cash ISAs between 2% and 3%, savings rates are not providing pensioners with the returns experienced some 12 months ago.

Also feeling the pinch are those retiring now who as well as lower fund values will also get lower income from their annuity.

Decreasing annuity rates are bad news for retirees who once anticipated high returns to fund their retirement, and with annuity rates already falling, the Bank of England’s move on quantitative easing means they are likely to be hit even further.

As economic conditions continue to hurt this group, The Daily Telegraph is running a ‘justice for pensioners’ campaign that aims to help Britain’s elderly savers maintain their income.

Equity release started life in the 1960s as an income-generating product for people with some savings or income.

But in this climate, equity release needs to be, and can be, a real solution for older home owners and innovative products in the coming months need to reflect this.

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