Enhancing a pension income is a tough task these days: banks offer middling to nil interest on savings. Investing requires time and a strong nerve and access to professional, impartial advice if you are to avoid high costs and charges. And with unemployment still so high, not every older person has the energy or ability to keep working once they hit retirement age; part-time jobs are hard to find.
One of the most lucrative ways to enhance a pension income – a home reversion or equity loan – hasn’t been available in Ireland since 2012 when Seniors Money stopped lending to over-60s against a portion of the borrowers home.
The company has a long waiting list of applicants, but may be delaying reactivating their service here until the wider, legacy issues that still dog the Irish property sector and the banks are cleared. Seniors Money always had lending restrictions in place which limited how much could be borrowed based both on the market value of the property and the borrower’s age with a maximum loan of 30% of the property, but our property market remains distorted and dysfunctional due to continuing negative equity and arrears and the Central Bank’s lending restrictions. Far too many older people are financially compromised by their ownership of buy-to-let properties that were purchased using their family homes as collateral.
Outside of private mortgage loans within families, this probably leaves the Revenue’s ‘Rent-a-Room’ scheme as the best remaining property-based way for older people to enhance an inadequate pension income.Get a cheaper Life Insurance quote now! or call Kieran@theinsurancedoctor.ie