5 ways to supplement your retirement income
While retirement is meant to be the time to relax, the reality for many is that it can be one of the most financially stressful periods in your life. With a third of UK retirees only having £10,000 or less in their retirement savings, many are looking for a means to supplement their income to get through their last days with comfort.
Fortunately, 74% of UK retirees own properties, and if this is you, you have some serious options. For example, financial institutions like Key Later Life Finance can help you find a range of financial solutions to aid you in your later years.
If not, there are other solutions for you too. In this article, equity release and retirement planning expert Jason Stubbs of EveryInvestor explores the world of supplementary retirement income with the hope of assisting retirees from all over the country. Take a look!
As one of the most popular financial solutions in the UK, equity release is designed for property owners over 55 who want to access their property’s equity without relocating. There are two main types of equity released to consider, a lifetime mortgage and a home reversion scheme.
With a home reversion plan, the homeowner will sell their property to the lender, below market value, in exchange for tax-free cash. When the last homeowner dies or moves to long-term care, the home is sold, and the lender will collect their portion, benefiting from the full value.
More popular than home reversions is the lifetime mortgage, a loan against your home that’s teamed with compound interest, which you can volunteer to repay in your lifetime, but it’s not compulsory.
If you’re considering equity release, you’ll need support from a specialist financial adviser. Alternatively, you can contact a lender directly.
Rent Out a Room
In addition to equity release, you can rent out a room in your home. Members of the UK rent-a-room scheme can benefit from a yearly income of up to £7,500 and enjoy company in their retirement. Alternatively, you can register rooms in your home on Airbnb.
What’s great about these options is that they can go hand-in-hand with equity release, seeing as though you’re allowed lodgers if you unlock a plan.
The most popular alternative to equity release is downsizing. If the kids have moved out and the home feels empty, there’s often no point in maintaining a large space. Bigger and older homes mean vastly more maintenance issues and costs, and may not be suitable for retirement.
However, moving is stressful and costly, and many retirees find it terribly traumatic. So, if you’re really keen to stay put, then equity release is likely a better solution.
Sell What’s Not Needed & Cut Costs
Let’s be honest, we all have tons of unused items, and some may be valuable. It’s worth considering selling some of your unused furniture, jewellery, or trinkets to supplement your retirement income, especially those gathering dust.
Furthermore, we strongly suggest that you regularly review your budget to ensure you don’t have any unnecessary expenses. Look out for unused magazine subscriptions or sneaky debit orders that you don’t even use.
Commercialise Your Hobby
Do you love to bake, knit, or paint? If so, you could make money off your crafts. If you’re not social media savvy, ask one of your younger loved ones to help set up an online store or to assist in marketing your products via the web.
While we all dream of massive savings or a hefty retirement pension, the reality is that life is hard. Gaining access to enough money to meet your retirement expenses can be challenging, and the last thing you want is to work until the day you die. If your parents have no retirement savings then show them this list for inspiration on what to do next.
Fortunately, some brilliant solutions for UK retirees allow you to supplement your retirement income. Get in touch with your financial adviser today, who will talk you through your options. You could be sitting on a goldmine and not even know it!
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