25 Jun 2022

Tipperary’s 43,000+ over 55’s to start considering their financial options post pandemic

TD says many of his Donegal constituents still confused by changes to pension arrangements

A large portion of Tipp people have insufficient funding plans in place for their retirement

A large portion of Tipp people have insufficient funding plans in place for their retirement

42% of those in or approaching retirement have no expectation of being financially comfortable in their post work years.

This is according to a new national survey from Spry Finance, an organisation that provides information and guidance to people thinking of applying for a Lifetime Loan, which allows people over 60 to borrow against the value they have built up in their home without the need to sell it, trade down, or make monthly repayments. 

The findings have been released on the back of Ireland’s nationwide COVID-19 vaccination programme, which Spry Finance says is causing people of a certain age, to consider new options in terms of how they live their life, and how they might fund this lifestyle, as the world returns to ‘normal’.

The survey of over 300 respondents, all aged 58+, commissioned by Spry Finance and undertaken by Behaviour & Attitudes, found that just 20% of respondents believes they will be financially comfortable in retirement.

Other highlights from the survey include:

23% of respondents who have already retired rely exclusively on the State pension for income
31% of those still working expect to rely solely on the State pension in retirement

Speaking on the findings Aidan Horgan of Spry Finance stated,

“We have been dealing with large numbers of applicants who have really had to curtail their lives during the pandemic but are now ready to get back to real life following vaccination. The feedback from these people is of optimism and positivity, as many make plans for their future following a tough 18 months. In many ways, the last year has persuaded them to make the most out of life. We expect to see enquiries soar over the coming months as more people over 60 become vaccinated”.

Spry Finance say the survey results demonstrate that limited cash reserves are a barrier for near or current retirees from living the life they had envisaged in retirement.

Mr. Horgan continued,

“In Co. Tipperary alone, there are approximately 43,194 people over the age of 55 – and the survey would point to a large portion of these people having insufficient funding plans in place for their retirement. However, a similarly large portion of these people own their own their own home and have a significant amount of equity tied up in this.”

Mr. Horgan continued,

“According to CSO census data and population projections, there were circa 650,000 people aged 60 or older in Ireland in 2006 and today this figure stands at around 1 million. Our older population is growing, but it has been well documented that pension provisions for this group are not what they should be.

Older homeowners are often ‘asset-rich’ but ‘cash-poor’ because, although they have built up equity in their home, many do not have a regular income substantial enough to allow them to live the retirement they desire and deserve. When compared with their counterparts in other countries, people in Ireland are less likely to trade-down as they get older. Property experts put this down to a lack of smaller cheaper properties in the mature areas where retirees typically live.

Financial options at this stage of life can be limited - most would not have access to a traditional re-mortgage product due to their age. And unlike the UK, where customers can choose from over 400 equity release products, the Lifetime Loan marketed by Spry Finance is the only equity release product currently available in the Irish market.

When the concept of equity release was explained to respondents of this survey, retaining ownership and maintaining the right to stay in the home until death were chosen by respondents as the key benefits. This is not at all surprising – people want to ensure that the place they have lived for many years, perhaps the place in which their family was reared, in a neighbourhood they are familiar with, is also the place that they spend their later years – and they want to be secure in that knowledge.”

Spry Finance report that, since their launch into the Irish market in January, evidence suggests that customer demand exists for an equity release product and that borrowers will continue to use the loan proceeds in similar ways to previous customers in Ireland and other countries.

Mr. Horgan explained,

“The loans are typically used for more than one purpose, but consistently, the most common use is to fund works to the home to make it more comfortable and energy efficient. After that, clearing small residual debts to free up monthly cashflow and funding specific reasonable lifestyle expenses are amongst the variety of other purposes for which the loan proceeds are used. These are generally once-off expenses that may be a challenge to fund solely from a retirees’ existing pension income.”

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