It’s a tough time for UK retirees. In the latest financial figures, retired couples have seen their weekly income after housing costs shrink to £349, a near 8% drop from £376 the previous year. This isn’t just a bad year—it’s part of a decade-long stagnation in pensioner income growth. Looking back to the ’90s, average pensioner incomes have barely budged since the financial crisis of 2008, climbing a paltry 8% from £319 in 2009/10 to today’s figures.
But it’s not just static incomes retirees are battling against; it’s the relentless rise in the cost of living, fueled by a period of high inflation. And to add insult to injury, many pensioners are not collecting the benefits they’re entitled to, missing out on an average of £1,197 per year according to Just Group research.
Claim What’s Yours: Unmissed Benefits
With nearly half of pensioners not claiming valuable benefits, it’s clear there’s a gap in knowledge. Guarantee Pension Credit, Savings Pension Credit, and Council Tax Reduction are just a few of the benefits that could bolster your income. One couple in Kent found they were missing out on a whopping £9,090 a year!
Strategies to Supplement Your Pension
Pension Credit Perks
Boosting your income could be as simple as claiming Pension Credit, which can top-up weekly income to £201.05 for singles and £306.85 for couples. Don’t forget the Winter Fuel Payment, which could hand you an extra £100 to £300 a year.
State Pension: Boost It
The government allows you to increase your weekly State Pension amount by making a lump sum payment. This scheme benefits those who have the savings to invest in their future weekly income.
Downsizing: A Smaller Home, A Bigger Wallet
Selling your current home to move into a smaller, cheaper one could free up some much-needed cash. Not only could you potentially clear outstanding debts, but you might also reduce your living expenses significantly.
Empty Nest? Rent a Room!
If you’re living in a house with spare rooms, consider renting them out. The government’s Rent a Room scheme lets you earn up to £7,500 a year tax-free.
If you’ve got a driveway, you’ve got potential income. Renting out your parking space could net you an extra £100 to £200 a month, especially if you live near busy workplaces or event venues.
Equity Release: A Last Resort?
While it’s not for everyone due to its complexity and impact on inheritance, equity release can provide a lump sum or a regular income by tapping into your home’s value. It’s crucial to seek financial advice before diving into this option.
If financial woes are keeping you up at night, remember that help is available. Organizations like Citizens Advice and Age UK offer free guidance and support to help you navigate your finances in retirement.
In conclusion, while pensioners today face financial challenges unheard of in previous decades, there are several strategies that can help bolster your income. From claiming benefits to smart property management, ensure you’re taking full advantage of the opportunities available to make your retirement years comfortable and secure.