Endowment policy cash could help cover retirement costs

Britons who have retired may want to make sure their household coffers are in as good condition as possible after a new survey has revealed the financial challenges retirees face once they leave full-time employment.

MGM Advantage said an extra £429 a year currently needs to be found by retired households whose main occupant is aged between 65 and 74. The cost of living for the average household has increased by 1.85 per cent - or £670.

Chris Radford, chief executive officer of aap, the UK's biggest buyer of endowment policies, said some of its customers who had retired had decided to sell their underperforming endowment policies so they could maintain a standard of living which they desire for their years outside of employment.

Running a retired household can prove expensive

After they have left the workforce, many Britons may want to invest time and money into ventures they previously could not enjoy because of their work hours.

However, MGM Advantage said the average annual household expenditure stands at £36,888. This drops to £23,106 when the main occupant is aged between 65 and 75.

With such high costs, maintaining a high standard of living could prove difficult if household finances are not large enough.

Commenting on the findings, Aston Goodey, sales and marketing director at MGM Advantage, said: "Many retired people have had to endure a rise in their cost of living. This, coupled with the fact that people are generally living longer is placing considerable pressure on retirement income.

Selling endowments could help cover the cost of retirement

Mr Radford, from aap, said some of its customers who had retired and who wanted to maintain a good standard of living had sold their unwanted endowment policies to help them in retirement.

He added that should aap make an offer to purchase an endowment policy, it will always pay more than the surrender value offered by the insurance company.

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