[UK] Pensioners taking "drastic" measures to escape poverty

from Find

Many British pensioners are living in so much poverty that they are often considering "drastic" action to bring in more money.

As many as a quarter of the British pensioners that responded to a Prudential survey out today said they don't have enough money to fund their retirement.

And with this lack of means, some 20% of older homeowners are thinking about selling their property and moving to a smaller one just in order to be able to put food on the table.

Some pensioners are considering moving to cheaper areas, while 4% of seniors are looking to escape the British weather in favour of warmer climates that are often less expensive to live in.

Rather than packing up and leaving, a further 17% said they would consider letting a lodger move in to their spare room to bring some extra cash in.

"As more pensioners realise that they might outlive their provisions in retirement, some feel compelled into some pretty drastic measures. Taking in a lodger for the first time when you're over 65 is probably not ideal for most people. If, however, pensioners do decide they want to rent out a room, they should make sure they are aware of the facts," said Ali Crossley, director of Lifetime Mortgages at the Pru.

In addition, older homeowners need to make sure they get permission from different people, depending on whether they are freeholders, tenants or leaseholders and mortgage holders also need to ensure they get the go-ahead from their lender to take in a lodger.

"Peoples' rights can also be affected. If a person receives benefits, taking in a lodger is likely to affect their entitlement. Renting out a room may also affect contents insurance, so you need to tell your insurer," the Pru spokesperson continued.

"And if the income from letting a room exceeds a certain amount, the landlord may also be liable to pay income tax. In short, there are a lot of things to consider."

But according to the Pru, these drastic measures wouldn't have to be taken if only Brits would start planning for their retirement earlier. The poll showed that 24% of pensioners realised they certainly didn't have enough money to see them through their retirement years, while a further 42% said their savings might not last as long as they would have hoped.

Ali Crossley concluded: "There's no substitute for planning. While obviously the earlier you start the better, there are many things you can do throughout your life to enhance your financial situation. It's worth talking to a financial adviser to find out more."