Pension news: Thousands of retirees struggle on the breadline despite owning their home
GETTY - STOCK Many pensioners own their home but live in poverty
In 2016/17, home ownership levels among retired households on the lowest disposable incomes of £7,619 a year was 89 per cent - equivalent to nearly 660,000 households and 40,000 higher than three years earlier. And experts are now warning that property ownership does not always protect against poverty in old age and pensions are the biggest factor between the elderly haves and have nots. Pensioners in the UK with the lowest incomes have among the highest levels of home ownership, according to the latest ONS Household Disposable Income and Inequality report That level is far higher than the 66 per cent for those in the lower middle income band on an average annual income of £17,493 and is almost as high as the wealthiest on £55,365 a year where 94 per cent own their own home.
GETTY - STOCK Retireess are advised to pay more into pension schemes as a way of saving for retirement
Property is often claimed to be the best way to save for retirement but looking at the figures it is striking that among the retired, higher home ownership levels doesn’t equate to higher income. Stephen Lowe
“Property is often claimed to be the best way to save for retirement but looking at the figures it is striking that among the retired, higher home ownership levels doesn’t equate to higher income,” said Stephen Lowe, group communications director at Just Group. He said that the figures should make working people think about saving more into pensions as the most reliable way of providing an income stream. “It is worth pointing out that it is how much you accumulate in State, employer and private pensions that appear to make most difference to how much income you have in retirement,” said Stephen Lowe. “That’s a strong argument in favour of ratcheting up pension auto-enrolment minimum contributions and encouraging the self-employed to pay into pensions too.
“It is also noticeable too that the pensioners with the lowest incomes also receive the lowest benefits. It’s important they make sure they are claiming their full entitlement and not be put off making inquiries just because they may own a property. “Overall, the message is that building up a pension is one of the best tools for delivering retirement income.” Meanwhile, those in retirement who are struggling on low incomes, a high proportion of them likely to be homeowners, should check that they are claiming their State full benefits and consider ways to access capital tied up in the property. Property is considered a good investment for retirement. Government figures for 2016/172 show that 49 per cent of those who are not retired think saving in property will make the most of their money, a rise from 40 per cent five years ago and far higher than the 28 per cent who favoured workplace or personal pensions. Nearly a quarter (23 per cent) said they plan to sell their home and downsize in retirement, but it is often too difficult for many pensioners to sell the home in which they raised their families or move away from friends.
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