Less than one in five (19%) people said they would consider downsizing their home in retirement, Hargreaves Lansdown (HL) has found.

The financial services firm’s latest survey of 1,500 people revealed that 48% said they wouldn’t, while the remaining 33% said they were unsure on what they would do.

HL stated those who are older were less likely to consider downsizing, with 14% of those aged 55 and over considering a move into a smaller home, compared to 23% of those aged between 18 and 34.

When asked why they wouldn’t consider downsizing, 37% said they didn’t want to move anywhere smaller, while a further 33% said they were attached to their home.

Cost was also a factor, as 21% said it was too expensive to move, while 8% cited stamp duty as a reason for not moving.

Furthermore, 7% believed they wouldn’t raise enough to make a move worthwhile.

Head of retirement analysis at HL, Helen Morrissey, said that downsizing may seem like a "neat solution" to retirement challenges, but warned it may not match up to reality.

She added: "There are reasons why downsizing could be on more people’s minds in the coming year. The inclusion of pensions in people’s estates for inheritance tax purposes from April 2027 will bring many more estates into the taxpaying net, prompting the need to look at ways to reduce the size of their overall estate. It could prompt people to consider downsizing so they can give away the lump sums raised to loved ones sooner rather than later, to reduce the value of their estate. It’s a decision that requires careful thought.

"Equity release is another option, as you can release money from your home without having to sell, and can be gifted to loved ones and reduce the value of your estate. However, this isn’t the cheapest of options, and you and your loved ones will need to be aware that interest will accrue over time and will need to be repaid either when you die or go into a home.

"When making decisions about your home it’s important to go in with your eyes wide open. Beyond downsizing, some people may think giving their home to loved ones while continuing to live in it will save the estate an IHT bill."

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