Extra support needed for “pathetic pensions”

Those approaching retirement age may be concerned about their income once they finish work and whether they will be able to live debt free.

According to Fair Investment, pensions are “pathetic” and do not provide enough money for older people.

It suggests equity release schemes as a potential way to top up pensions for property owners.

Of the two types of equity release scheme, the most popular is the lifetime mortgage, which is a loan secured against a home. The lender is repaid once the house is sold, whether it is after death or if the owner decides to move out, so it remains in the owner’s possession for as long as he or she likes.

The other option is home reversion plan, which involves selling the property to a reversion company or an individual but staying on as a tenant throughout retirement.

Chartered financial planner at Fair Investment, Sharon Bratley, said decisions should not be taken “lightly”.

“Remember, this is your home you are dealing with and you should seek extensive advice before taking out any kind of loan on your home,” she said.

For those worried about arrears and other debt management problems, debt advice is available from ClearDebt.