Most of us think of ways in which to save money that allow us to live a comfortable life, but some require these methods more than others. Pensioners are one group of individuals who have to live on a fixed income, whilst costs around them rise and need to ensure that cash is spent carefully, but also getting clever with other avenues that bring in the dough.
Some methods of bringing in extra cash practically apply to everyone, but others relate to the unique situation of a pensioner, such as equity release and special mortgages. Find out more about the latter by clicking here.
Renting out a room
Those with spare rooms at home could do well to turn them into a guest bedroom and rent it out to those who require short-term (or long-term) accommodation. By doing this, it is possible to rake in nearly £5,000 per year (or around £400 per month) and is one of the best methods of raising extra cash.
Some may feel uneasy by letting strangers into their home to stay, but feel free to set up an interview process where you can get to know the person as well as possible to make you feel more secure.
Opening a cash ISA
You pension will only allow money to be released at certain points in the year, but to be able to get instant access to cash, look to open a cash ISA.
Opening such an account means that you don’t have to pay tax on your interest and there are a few banks that still have decent rates.
Unlocking money tied up in property
Equity release is a method not advised for everyone, but it can be a great way for people who are cash poor-property rich. Going through with equity release enables you to unlock money tied up in your home to be used for day-to-day purposes or perhaps something special such as a long-term investment.
In most cases you’ll be able to live in your home until the last surviving spouse passes or moves into long-term care and it is guaranteed that there will be no debt left to your estate.
Using your tax advantages
Keep in mind that each person can make up to £10,600 in capital gains each year without having to pay tax on them. Therefore, make sure to establish them up to this maximum allowance to avoid a bill later on.
