Over half of Just Retirement Solutions’ customers seeking advice on equity release were failing to claim any or all of the state benefits they are entitled to.
The firm’s research found that 20% were failing to claim any benefit, up from 18% in 2010 and, on average, these people are losing £872 a year, with the biggest loss £8,766.
34% are receiving some, but not all their benefits (up from 26% in 2010), while on average these people are losing £676 a year, with the biggest loss £1,408.
“The figures provide more compelling evidence of a ‘squeezed middle’ who are finding it hard to make ends meet,” said Stephen Lowe of Just Retirement. “They tally with official figures showing it is mainly home owners on low incomes who are missing out.
“Our concern is that there are huge numbers of people struggling with their day to day finances who only find out they are missing income when they turn to professional help because they can no longer make ends meet.”
Lowe said Just Retirement’s research shows a growing trend for using property assets as a way to generate regular income for day to day living rather than for one off purchases, such as holidays or home improvements.
Just Retirement believes the figures highlight an emerging trend for pensioners to supplement their pensions and savings with new sources of income, but it warned their first stop should be to check they are claiming full benefits.
“It may be tempting to blame this on today’s low savings and pensions returns or high pensioner inflation, but the reality is that more people are retiring on pension funds that are simply too small to sustain them,” said Lowe.
“Many of those we advise have worked all their lives and have perhaps never claimed any benefits. They know about the state pension, but may imagine that because they own their own homes, often valued at more than the national average, they are not eligible for any further state help. It is only when they come to our advisers that they find they are missing out on hundreds or even thousands of pounds a year.”
Lowe said the clear message is that all pensioners should seek professional help – from the Citizens Advice Bureau, online at direct.gov.uk, or from a financial adviser – and should not assume they know enough to navigate the complex benefits system on their own.