Brits in their sixties own a quarter of Britain’s £4.01 trillion property wealth, totalling £993 billion, according to a recent report from LV=.
The report, which looks at retirees using their property to pay for retirement, found that the value of the average property owned by sixty-somethings is £272,000 – £6,000 higher than the national average. Three quarters (75%) of people within this age group are mortgage free, and one in 12 (8%) own a second home.
The rise in people using their property to fund their retirement is likely to have been driven by increasing house values over a long period, combined with the low interest rates available on savings that has reduced retirement income, says LV=.
With just one in sixteen (6%) homeowners over 50 stating that the value of their home has decreased in recent years, it is perhaps no surprise that half (52%) of those in their sixties and nearly two thirds (63%) of those in their late fifties are considering accessing money from their property to help fund their lifestyle in retirement.
In the past 12 months alone, 114,000 of those aged 55 and over have taken out equity release, with a further 76,000 having freed up cash in their property by downsizing.
As well as allowing retirees to pay for once in a lifetime holidays and luxury purchases, some access the capital locked up in their home to pay off their mortgage and existing debts. Of those who have released equity from their home, four in ten (38%) said that the cash will be used to supplement their retirement income and 4% will use the money to cover their own care costs.
“There are numerous ways that retirees can access the capital tied up in their home including deciding to downsize or take out equity release,” commented Richard Rowney, Managing Director of Life & Pensions at LV=. “For those considering unlocking the money in their home it is important to seek professional advice and explore all of the options available to them.”
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