Over-50s don’t save enough

A worrying 23% of people over 50 have not started sav-ing to fund their retirement, research from Mortgage Ex-press reveals.

MEX’s Lifetime Report polled the financial attitudes of 358 equity release and 630 non-equity release customers aged over 50.

It found that non-retired respondents had, on average, an annual household income of 25,700. But this more than halves on retirement with retirees surviving on just 11,800 per year on average, including their state pension.

Despite detecting a complacent attitude towards saving for retirement, the research also discovered most equity release customers have a mature attitude towards this product.

It found 92% went for a lifetime product because they did not want to downsize their accommodation and 62% looked at all alternatives before opting for equity release. Because of the effect on their heirs, 91% involved their families in the decision-making process while only 3% kept their decision to opt for equity release a secret from their children.

In terms of spending the money, most customers took the sensible route with 56% enhancing their home and 61% paying off debts.

Gus Park, head of lifetime mortgages at MEX, says: “Our research reveals that the average retiree is living on a household income of 11,800, with a quarter of those who are yet to retire admitting they haven’t even started to save yet.

“Equity release looks set to become an increasingly popular option for those looking to enhance their standard of living in retirement.”

Stuart Wilson, managing director of Equity Advice, says: “People in their 40s and 50s are galloping into retirement with inadequate provision. They haven’t had the benefit of a culture of saving and the government has let them down. This is a time bomb.”