There are over 10 million over 65s living in the UK. Around three quarters have bought the home they currently reside in, yet according to a new survey, around two million UK pensioners plan to sell their homes in order to afford the cost of retirement.
The report, carried out by the Prudential, shows that by selling their property in order to purchase a smaller property, elderly homeowners could expect to receive an average of £62,000 to help towards meeting the costs of retirement. The Prudential believe that if just one million homes are sold as a result of downsizing to a more affordable property, this could be a major boost for the housing market.
Many of the retired homeowners responding to the survey were still paying mortgage payments of around £254 per month (on average). By selling their home, UK pensioners could reduce or avoid having to pay mortgage payments in the future, giving them an average of £62,000 to spend on retirement costs in later life.
According to the survey, most respondents hope to downsize their property and only one in 20 plan to move into a retirement home.
A proportion of the respondents said they would use the excess money from selling their home to pay off debts, while others planned to use the money for general living costs and to enhance their pension.
Specialist in retirement income at the Prudential, Stan Russell, said: “Housing wealth is potentially a significant source of additional retirement income for pensioners who own their own home. This is why so many of Britain’s pensioners are planning to become last-time buyers. However it is dangerous for people to assume that housing wealth can make up for a lack of retirement planning.”
Michelle Mitchell, director general of Age UK said there were still limited options available for older people, due to a growing gap in housing wealth across the different regions in the UK. She said: “Whatever decision older people make about their housing it is important they obtain independent advice to make an informed decision based on their individual circumstances.”
Julie is a law graduate who qualified with Price Waterhouse in 1994. Julie joined Smith & Williamson in 1997 and became a partner in 2001. With Mike Stevenson, Julie set up Middleton Partners offices in Salisbury and Southampton, both of which are now part of Begbies Traynor.
Julie is a member of the Insolvency Practitioners Association and is a Fellow of The Association of Business Recovery Professionals. Julie deals with all aspects of Corporate Recovery and turnaround work and takes all form of personal insolvency appointments.