Despite recent increases, many pensioners are barely breaking even, as the state pension only exceeds the average cost of living for pensioners by £74.40, according to research by Senior Capital.
The national research, conducted by Almond Financial, highlights the negative impact the cost-of-living crisis has had on Brits’ ability to contribute to their pensions, with 35% of Brits currently unable to fund their future retirements.
The research also found that 32% are not able to make personal contributions to their pension.
The UK currently ranks 17th out of 50 European countries in terms of pension breakeven.
A total of 21% of Brits have delayed retirement to keep working due to having insufficient funds in their pension pot.
And 25% of Brits say their biggest mental health strain is worrying about funding their retirement
Meanwhile, 37% of Brits say their quality of life is going to deteriorate because they don’t have enough money in their pension funds.
With household disposable income per head predicted to decline by 1.5% according to the Office for Budget Responsibility (OBR) in 2024, Britain’s recessionary climate has seen the cost-of-living crisis force 32% of the nation to halt personal contributions to their pension pot.
Senior Capital’s data shows that 21% of respondents said that despite paying off their mortgage in full, they were still unable to live fulfilling lives due to not having enough money in their retirement funds.
Managing partner of Senior Capital, Rudy Khaitan, said: “In today’s society, many over 55s find themselves in a paradoxical situation – they are ‘asset-rich’ due to the value of their homes, yet ‘cash-poor’ with limited disposable income.
“As the cost of living continues to rise, many find themselves struggling to make ends meet, despite owning valuable properties.
“Equity release offers a solution to this dilemma by enabling homeowners to tap into the wealth tied up in their homes.
“It can provide a much-needed cash injection to enhance their quality of life, cover unexpected expenses, or even help their families.
“Equity release is more than just a financial transaction; it’s a means of bridging the gap between asset wealth and living standards, ensuring that those who have worked their whole lives to build their assets can finally reap the benefits of their hard work.”
