By switching its formula from retail price inflation (RPI) to consumer price inflation (CPI), the government has taken away the supposed rise in the basic state pension, it has been claimed.
This could see a number of homeowners aged over 55 years considering using some of the value of their property to boost their income through the use of a lifetime mortgage.
According to the Trades Union Congress (TUC), the state pension will be lower in 2011 than it would have been had the system stayed the same.
Brendan Barber, TUC general secretary, explained: “This very much looks like giving to pensioners with one hand, while taking away with the other.
“Switching RPI to CPI takes it all away again and we end up with smaller pensions than we would have had under the old system. The differences may not seem great, but many pensioners need to count every penny.”
Homeowners aged over 55 years who are curious about how their property could provide them with a tax-free cash lump sum can find out by contacting Key Retirement Solutions for equity release advice.
Posted by Alison Stephenson
