Energy prices expected to rise by over 50%

Energy prices

It is believed that energy bills will increase 14 times faster than wages over the course of 2022

Energy prices are expected to rise by over 50% come April 2022, according to energy regulator Ofgem.

It is believed that energy bills will increase 14 times faster than wages over the course of 2022.

The impact that further energy price hikes will have on over-55s in the UK is likely to be substantial, especially with rising inflation, according to Stuart Wilson, corporate marketing director, more2life.

Retirees are in a particularly vulnerable position as many are unable to increase their contracted hours, switch careers or work to secure a pay rise in the same way that the working population can, leaving them solely reliant on retirement income.

This also follows a difficult two years in which pension pots have suffered repeated blows.

Wilson added: One option for retirees to address rising costs is to boost their retirement income through equity release, particularly given the average UK house price is now sitting at a record high of £278,123.

Whether it is to manage rising energy bills or to consolidate credit card and loan debts to improve their financial security, retirees can often use the equity in their homes to their advantage.

Colin Bell, co-founder and chief operating officer of Perenna, said that many homeowners and advisers will not have seen energy prices hit these heights before.

Due to this, he believes advisers will have a vital role to play in helping borrowers to mitigate the risk of an income squeeze.

Those customers who fixed their energy tariff for a long period really have protected themselves from this current situation, he added.

In these uncertain times, Bell outlined that fixing your mortgage rates for a longer period can similarly act as a suit of armour that could protect you against the shock and distress of unexpected hikes.

As more lenders join the fixed-for-life space, he believes it is worth exploring if such a product could help provide peace of mind for a concerned client.

He added: Conversations with homeowners around energy efficiency improvements will also be especially valuable over the next few months as payback periods get shorter as energy costs rise.

He said: While many might not have the disposable income to invest in insulation or other home improvements, it could help limit the damage of future energy bills if you can fund this with your mortgage and protecting that payment by fixing it for life.

Disclaimer: The opinions expressed by our writers are their own and do not represent the views of Getting Money Wise. The information provided on Getting Money Wise is intended for informational purposes only. Getting Money Wise is not liable for any financial losses incurred. Conduct your own research by contacting financial experts before making any investment decisions.

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