Almost one in three people retiring this year are planning to use their property wealth to help boost their retirement income, according to new research from the over-55s specialist adviser, Key.
A study conducted amongst a sample of 1,000 people expecting to retire in 2020 showed they own property worth more than £142.5bn with an average of £388,900 each.
Key’s research found 30% of those retiring this year will use their property wealth in retirement, with 46% looking to downsize to a smaller property, and another 23% considering equity release or remortgaging.
Key CEO, Will Hale, commented: “Property wealth is established as a major factor in retirement planning with one in three people retiring this year looking to the money invested in their home as a way of supplementing their income.
“Many will not need to use their home as part of retirement planning, but it is worrying if people are not taking property wealth into consideration due to a lack of awareness of the options available to them, or as a result of myths or misconceptions about products.”
The nationwide research also indicated that just two in five property owners said they were happy with their expected retirement income and did not need to consider their property wealth.
The biggest reason for not using property wealth in retirement was revealed to be the desire to leave an inheritance to family – with 16% of homeowners wanting to leave the house to their family. Another 15%, however, were worried about borrowing money, and a further 15% indicated they did not want to move.
“Our research shows many are worried about borrowing money or moving to a new house while others are concerned about making mistakes,” Hale added.
“These customers could benefit from information and advice when assessing their options for using property wealth, and while equity release is not right for everybody, modern lifetime mortgages with low rates and flexible features such as the ability to service interest or repay capital mean that they offer potential solutions for a wider range of customers than ever before.”
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