Housing equity increasing in importance as retirement incomes squeezed: Air

With nearly one in ten people who planned to retire having to delay their plans due to the cost-of-living crisis, Air is calling on advisers to ensure they are discussing the uses of housing equity as part of the retirement planning discussion.

Since the end to the Default Retirement Age in 2011, Air says it has seen a steady increase in the number of older employees with ONS data suggesting that there are 1.4m over-65s in full-time employment. However, some people will find this difficult due to challenges such as ill-health or caring responsibilities.

Air is concerned that with Pensions and Lifetime Savings Association data showing that that retirees hoping to achieve a basic standard of living in retirement will need to increase their expenditure by 18% year-on-year due to inflationary pressures, some people will be forced back into work.

Stuart Wilson, chairman at Air Club, commented: “Since the end of the Default Retirement Age, we’ve seen an increasing number of people work into retirement and there are now over a million over-65s working full time. While some people want to work, other will delay retirement or return to a job that they may struggle with as the rising cost of living has put a real strain on their finances.

“For a significant proportion of people, their home is their largest asset and advisers should be discussing the role that housing equity can play. We have the tools and the specialist knowledge to help this age group borrow flexibly and responsibly, it’s just a case of raising awareness amongst consumers.

“The FCA Consumer Duty has made it clear that good consumer outcomes will be the focus of the IFA sector in coming years, so more firms need to consider whether they can provide this advice themselves or set up a referral relationship with a trusted partner to support this need.”