Over-50s are increasingly planning on using their property to fund their pension, new research has revealed. Many plan on using equity release, while others will downsize or turn to renting in a bid to boost their retirement income - creating new opportunities for landlords.
Research from LV= revealed that the number of working people aged 50 and over in the UK who plan to use their property as their pension has doubled in the past year to 52 per cent.
It was found that 75 per cent of people in this age group owned their properties outright while the average homeowner aged over 65 has lived in their property for an average of 25 years. The value of the average property owned by individuals in this age group stood at £258,000. This is more than £15,000 higher than the national average of £242,000.
According to LV=, for many unlocking the capital in their homes would provide a significant income boost. The company noted that the increase in people using their properties to fund their retirement is also likely to have been driven by increasing house values over a number of years, as well as low interest rates on savings.
In addition to building up equity in their homes, over-50s have spent around £30,000 on extras to transform the property into their perfect house.
Vanessa Owen, head of annuities and equity release at LV=, commented: "The number of over 50s who plan to use their home as their pension has risen steadily since we first launched our report in 2010 and it is clear that for a large section of the population their home is will play a key role in funding their retirement."
Ms Owen noted that property is often the largest asset someone has when they hit retirement, especially if they have lived there for quite a while. Often, the equity that can be gained from property will significantly outweigh any pensions savings they have.
- Wednesday 02 October 2013