Property wealth tops pension savings for retirees

Retirees have almost five times more money in their home than their pension, which could lead to many using property wealth to fund their retirement.

That’s according to analysis by OneFamily which found for every £1 in pension savings, over-65s had £4.70 in property wealth.

The combined wealth of the over-65s when looking only at their pension pots was £336 billion compared to £1.6 trillion this generation held in property wealth.

With average retirement lasting between 18 to 20 years and an expected income of £24,000 needed each year, the average pension would last less than two years, even when taking into account state pension payments.

It meant those reaching retirement were increasingly looking at other ways to fund their retirement plans.

Nici Audhlam-Gardiner, managing director of OneFamily Lifetime Mortgage, said: “As these numbers show, retirees will need to look to new sources outside of their pensions for retirement funding.

“With the value of property having risen over many years, it’s no wonder that homeowners are turning to this source of income to fund their later years.”

Unlocking property wealth

OneFamily’s research showed a fifth of retirees were already planning to use their property as a source of funding for their retirement.

They would do this either through downsizing, making buy-to-let investments or unlocking the capital in their homes though lifetime mortgages.

In 2018, nearly £4 billion was in equity was released through lifetime mortgages. These allow homeowners over the age of 55 to take up to 50% of the equity in their property as a loan.

Anyone considering releasing money through their home should seek professional advice before proceeding. Currently, according to OneFamily, only one in five financial advisers are qualified to offer advice on equity release.

What Mortgage

If you are considering equity release, please contact us at Viva Retirement Solutions.

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A lifetime mortgage is a long term commitment which could accumulate interest and is secured against your home.   

Equity release is not right for everyone and may reduce the value of your estate

Equity Release Council

Our fee for arranging a Lifetime mortgage is £750 payable only on completion. 

Research has shown that some companies charge over £1,500 or 1.95% of the loan, whatever is greater, for this service including a letter of suitability. 

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