Rising living costs raise prospect of equity home loans

More and more people may have to turn towards home equity loans as a rising inflation rate is expected to drive up costs.

Retirees need to seek out an extra £800 to maintain their standard of living and cover day-to-day costs, according to estimates drawn up by the retirement income specialists, MGM Advantage.

The annual Consumer Price Index has shot up to 3.7 per cent, which would force pensioners to spend around £23,000 each year, an analysis of the ONS Family Spending Report 2008 and Consumer Price Index has shown.

Aston Goodey, sales and marketing director at MGM Advantage, said the living costs were rising due to an increase in the rates of inflation.

He added: "This is particularly difficult for retired households where they often have fixed incomes."

Recently, Danny Cox, head of financial planning strategy at Hargreaves Lansdown, wrote in an article for This Is Money that home equity loans could be a good option for making up any deficits in retirement income.

Equity home loans from Ashall Glover Financial Services.