Older women living alone are turning in increasing numbers to using their property as a source of income, and taking out lifetime mortgages to keep their heads above water, according to new research from Canada Life
They quote figures from the Equity Release Council’s Spring 2019 report showing that single women over 55 accounted for over 25% of new equity release agreements made in late 2018 – a figure that has leapt up by 50% from the previous year.
Canada Life’s figures show that women believe they will need £1,421 a month (after tax) to live comfortably in their later years.
However, figures from the Department of Work and Pensions demonstrate that many are living on far less: on average, single female pensioners received £206 per week in 2017-18: a gap of over £500 between what women receive… and what they would like to receive.
The figures are reinforced by recent research from the World Economic Forum which painted a bleak picture of the average British woman outliving her savings by 12 years.
There is a rapidly growing cohort of women living alone in later life: the latest ONS data shows there has been a 20% rise amongst those aged 65 or over who will be living alone and dependent upon one income.
Alice Watson, head of marketing and communications at Canada Life Home Finance, said: “The outlook for women in retirement is concerning and the recent findings that show women will outlive their savings by over 12 years is something that policymakers must wake up to.
“However, what we are seeing more immediately is that women are being resourceful. They are aware of the fact that the wealth in their property can help them. The growth in women using lifetime mortgages demonstrates how equity release can fill the pensions deficit faced by women in retirement.
“We’re aware that 20% of lifetime mortgages are used to cover daily living expenses in retirement, and the recent uptick in single women taking out loans indicates they’re using the wealth contained in their houses in order to live more comfortably in retirement.
“The fact is that we’re living longer and that many people live alone in their retirements. This will put pressure on people’s finances.
“We expect the trend of people using their property wealth to help relieve some of this pressure to continue. As a sector we must be ready and able to help people through sound, regulated financial advice and to provide flexible products with which people can navigate their way through this emerging financial challenge.”
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