This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Private Pension Sources Will Become More Important In The Future Says Think Tank

LONDON, January 14, 2013 /PRNewswire/ --

REFORM says financial products enabling people to convert assets into income streams, such as equity release, will become more important in the future

According to a new report published by independent non-party think tank REFORM, as the UK struggles to deal with an aging population, the baby boomer generation and beyond will have to look to private streams of income to fund retirement. The UK government is already feeling the pinch and as a result it has cut back on public spending while at the same time raising taxes.

Currently the government picks up the slack where consumers fall short. For example, in 2009 the UK government was responsible for 83.2% of the total spending on health care and 49.8% of pensioner incomes. Work and private capital were responsible for just 11.9% and 38.3% respectively of pensioner incomes. But this will have to change says REFORM.

REFORM says there will need to be a greater emphasis on personal financial support using products such as equity release.

Equity release is a simple financial product designed to unlock cash metaphorically 'locked up' in a homeowner's property. Despite being cash poor, many retirees are sitting on virtual pots of gold as their homes are worth hundreds of thousands of pounds; many of these retirees are completely mortgage free. Equity release schemes often work in a similar way to mortgages; a loan is given based on the value of the property, with regular cash withdrawals also available. There are various types of equity release plans to choose from, each offering different benefits.

Bower Retirement Services is one of the leading equity release advisory firms in the country. It can assist in choosing type and provider of equity release and BRS equity release is completely impartial and unbiased. Equity release can be suitable for pensioners as they offer income during retirement as well as large lump sums to cover, for example, overseas holidays and clearing any outstanding debts.

However, all the while REFORM predicts total pension spending by the government will rise from 5.7% of GDP in 2011-12 to 7.3% from 2051-52 but that there are questions surrounding where this extra funding will come from. With greater numbers of people in retirement vis-à-vis employment, funding a pension scheme similar to those currently in place is going to be a real challenge. Equity release plan could help to bridge the retirement funding gap.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG

Markets

DOW 18,034.93 +208.63 1.17%
S&P 500 2,100.40 +19.22 0.92%
NASDAQ 4,994.6020 +62.7870 1.27%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs