Here’s how much your retirement could cost you
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THE age at which you retire is up to you but thinking about if you can afford the retirement lifestyle you’d like is important for making this decision.
If you’re not sure, you’re not alone. A recent survey by Which? revealed that 51% of people yet to retire said they weren’t confident how much money they’d need to live a comfortable retirement.
To help you think about your future finances, here’s how much your retirement could cost you.
Retirement financial planning
The Pensions and Lifetime Savings Association suggests for a single person household to live a moderate lifestyle they would need £31,300 each year, increasing to £43,100 for a two-person household.
For a single person household, this includes costs such as:
- Home maintenance and decorating
- £55 on weekly groceries
- £63 on weekly meals out and takeaways
- Running a 3 year old small car
- Getting occasional taxis and trains
- A two week 3* holiday abroad along with a long weekend UK break
Alternatively, for a minimum standard of living you’d be looking at £14,400 for a single person or £22,400 for a two-person household.
How you could supplement your income
One way to supplement your income could be through using some of the value that’s built up in your home, known as equity release.
If you’ve owned your home for a number of years it’s likely increased in price, and you could tap into this wealth.
What does equity release involve?
One of the benefits of equity release is that you can reduce your committed monthly expenses as equity release requires repaying any existing mortgage.
Plus, there’s no requirement to make regular repayments with equity release as the money you release, plus accrued interest, is repaid when you die or move into long-term care.
Equity release may involve a home reversion plan or a lifetime mortgage. A lifetime mortgage is secured against your property, and you continue to own 100% of your home.
Through initial advice is provided for free and without obligation. Only if your case completes would an advice fee of £1,895 be payable. Other lender and solicitor fees may apply.
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