£114,436 is the magic number for the cash over 55s believe they need in the bank to bolster their retirement income.
The figure comes from asking a thousand over 55s how much money they feel they need to feel comfortable for the rest of their lives on top of what their income each year.
But the older the person, the less they believed they required as a financial safety net – probably because they have already seen how much they spend in retirement.
Although those aged 55 to 59 calculated £180,741 would be enough, those in their 60s felt £101,811 would do, while those over 70 reckon they could survive with £93,801.
The study by financial firm SunLife concluded that the over 55s could find this money from releasing cash locked in their homes.
Financial options
The analysis revealed the average retirement saver aged over 55 own a home worth £290,659.
Most have lived in their property for at least 20 years.
Around 82% own their home with no outstanding mortgage, while those still paying a loan owe £55,000 leaving them with an average equity of £282,623.
Many equity release lenders will offer a deal based on 60% of a home’s value – £174,395 on a property worth £290,659.
As 62% of over 55s told researchers they do not want to downsize, equity release gives them a financial option, said SunLife’s equity release service director Simon Stanney.
Property rich but cash poor
“This is a generation that are generally property rich and cash poor due to healthy increase in the value of their homes, but inflation eating away at pension pots and increased living costs,” he said.
“Around 62% of those surveyed said they categorically did not want to downsize, which means the solution for the majority could be to unlock some of the value in their homes via equity release.
“Equity release lending has more than doubled in the past two years with someone releasing equity from their home every 20 minutes – a total of £8 million a day. Equity release is fast becoming the preferred choice among people over 55 to fund the retirement they want.”
