Quote Ref: WS1

One in five over 50s intend to use property wealth to fund retirement

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Soaring property prices over the last 20 years, longer retirements and decreasing pension pots are responsible for an estimated 3.9m Brits planning to use their property wealth to fund their retirement suggests new research.

This equates to around one in five over 50s intending to use property to contribute towards their income over the next ten years. 

The study says that over 50s in particular have benefitted from risingproperty prices, now owning an estimated £2.3trn of the nation’s total £4trn property wealth.

There are a number of ways the property wealth may be used:

  • 33% of retirement income is expected to come from buy-to-let investment;
  • 28% of retirement income will come from around 1.8 million properties being sold as over 50s downsize;
  • an estimated £37bn is expected to be released by over 50s taking out lifetime mortgages. 

Bricks and mortar vs. pensions 

Over a quarter of the 50+ age group who already have - or intend to - use property to fund their retirement, say that property investments are more reliable than pensions, with15% feeling that pensions simply can’t be relied upon. 

Lack of advice

The study also revealed that many people may not have fully explored the options available to them when planning their finances for retirement, with just over a third (37%) having – or planning to – consult a professional for advice.

Of those who have already used financial advice, however, 84% felt it was essential / useful to their financial planning, as it allowed them to consider other products such as enhanced annuities or lifetime mortgages which they otherwise would not have thought about.