Three in ten (29%) people aged 55+ will struggle to afford even one holiday this year, according to the latest findings from Over50schoices.
As a result of this, research found that many retirees are considering equity release in the year ahead (6% of over-55 homeowners who own their home outright), rising among those who have an outstanding mortgage (17%).
Over50choices’ Boomer Barometer found that more than one in four (26%) people aged 55+ admit they will struggle to pay their bills in the next 12 months, while 17% of over 55s who pay rent or still have a mortgage, say they will struggle to afford it in the year ahead.
Some of the bigger expenditure the over 55s may have dreamt of in retirement may also get put on the backburner due to the cost-of-living crisis; a third (31%) said they will now struggle to pay for home improvements they’d like to make this year.
Furthermore, 23% will struggle to pay for changes to their home they need for a good quality of life, and this is highest (36%) among homeowners who still have an outstanding mortgage.
Consequently, Over50choices, the later life financial planning company, found that 13% of all over-55s said they may have to put retirement plans on hold in the next year, while a fifth (23%) aged 55-64 who have retired (17% of women), may have to come out of retirement and work in the next 12 months.
While just 6% of over-55 homeowners who own their house outright say they will consider equity release in the next year, this rises to almost a fifth (17%) of those with a mortgage.
Ashley Shepherd, founder and managing director at Over50choices, said: “The cost-of-living crisis is hitting people across all walks of life, but many in or nearing retirement are finding it a struggle to pay for their everyday expenses, such as bills and housing, while also having to put off a few small luxuries they may have been dreaming of in retirement, such as a holiday or home improvement.
“Female retirees look set to be hardest hit of all, with one in three missing out on a holiday this year, vs just one in five men. Furthermore 31% of women aged 55+, vs 21% of men, also admit to struggling to pay their bills in the year ahead.
“A sixth of over-55 homeowners who still have an outstanding mortgage, also look set to consider equity release this year to help them navigate the cost-of-living crisis.
“The popularity of equity release has risen substantially in recent years with over £6.2bn borrowed in 2022 alone; a record year, up 23% year-on-year.”
He added: “Our research has shown that the majority of the over-55s in the UK still don’t fully understand how equity release works and that it’s a highly regulated and safe guarded product.
“We want to educate and empower consumers to help them be as informed as they can and have created a new-to-market calculator and tools to help them on their journey.”
