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Coping With Retirement Debts

Coping With Retirement Debts
Liam: A recent study conducted by Help the Aged and a popular high street bank has revealed some rather shocking statistics. It discovered that a great number, one in four to be exact, of those entering retirement have outstanding debts.

With many people reaching the state retirement age owing four times as much as they did a decade ago, they are essentially being forced to stay in employment in order to meet financial commitments.

Once in retirement, chances are you will be on a lower income than you were during your working life.
This, along with rising living costs and any outstanding debts can make it very difficult to keep afloat.

We are all required to pay tax, no matter what our age; once over 65 though, you do not have to pay as much. More accurately, those over 65 have a higher personal allowance, meaning that they can earn more before they are taxed.

It's probably worthwhile seeing if you are entitled to any benefits, such as Pension Credits, Council Tax or Housing benefits. Your eligibility for each of these will depend entirely on your personal circumstances; however there is no harm in enquiring.

It's worth noting that many people who are perfectly eligible for benefits and higher tax allowances do not enquire and are thus losing out as these are not things that happen automatically.

With the average house price in England and Wales currently £184,346 those in retirement who own their home are in a particularly advantageous situation.

For instance if you find that your current home outsize's your requirements then it may be worth selling up and moving somewhere smaller, and living off the money left over.

A less invasive option for those who do not wish to go through the rigmarole of moving house is equity release. Similar to a secured loan, equity release schemes allow you to borrow money against the value of your home, which will be repaid upon your death when the lender sells your home.

It's important to note that equity release is a big commitment, and an IFA (Independent Financial Advisor) should be consulted prior to making any solid decisions.

About the Author
For further information visit PensionAge for useful information on current topics, 3 online forums, State Pensions, Pension credit , Council and also links to news stories related to older people across the UK. Lots of pages covering hospital stays, care homes, tax benefit, attendance allowance, Disability living allowance, state pensions and many more.