Baby Boomers have to sell homes for retirement

PERSONAL FINANCE AND INVESTING

Baby Boomers forced to sell homes for retirement

In a new study today in the UK, it found that 46% retirees of the baby boomer generation will be forced to sell their homes if they had to find money for care fees. A lot of people believe that the basic state pension, which is currently £84.25 a week will cover the cost of care. The average weekly cost of residential care is closer to £400 a week which leaves a massive funding gap or nearly £16,500 a year.

A lot of adults in this country are led by a false sense of security believing that one day, should they need care, it will be funded by the state out of taxpayer's money. The reality cannot be more different.

To this end, a lot of the baby boomers are resigned to the fact that they will have to sell off their homes. The current care home funding system is unfair and unreliable with the arrangements penalising the financially prudent. If you have more than £21,000 in assets ( including your home) you will have to pay 100% of any fees if you live in England. For those with no savings or homes, the care is then free. The rules are different in Scotland.

This means that today's pensioners are facing longer retirement with pension pots half the size of those who retired over ten years ago. A second blow is that annuity rates which is an income for life that is bought using the pension pot, has also collapsed in the last decade. A comfortable retirement is now only available to a small proportion of people.

There is a now a call for this unfair system to be reviewed as many homeowners resent having to sell their properties when those people who have not had the burden of a mortgage don't have to pay for care.

Recently, Moneyfacts produced some figures that showed that pension pots have halved in a decade because of huge falls in annual bonuses paid on policies. Ten years ago, someone who paid in £500 a year would have a pension pot of £120,239. Today the equivalent figure is worth just £55,992, a fall of 53% .

One in five people questioned for this study said that they have not thought about this eventuality or even planned for retirement. So if this has never crossed your mind, now is the time to start taking some advice and putting away some money for retirement.

Here are some books and resources that can give you some guidance.

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articles > baby boomers have to sell homes for RETIREMENT

PERSONAL FINANCE AND INVESTING

Baby Boomers forced to sell homes for retirement

Here are some books and resources that can give you some guidance.

personal finance books

finance books for women

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