Nearly half of over-55s plan to downsize

In September 27, 2017
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More than 3.9 million over-55s intend to downsize to a cheaper property, but it is convenience rather than the cash that is their biggest motivation, according to research from Prudential.

47% of over-55 homeowners plan to move to cheaper homes in later life. On average they expect to raise around £112,000 in equity by downsizing. More than one in seven (13%) said they could not afford to retire unless they downsized.

However, it is not just about finance – for many, the main reason for downsizing is the ease of maintaining and running a smaller home in retirement. Nearly three-quarters (74%) rated convenience as their main reason for downsizing.

Concerns about a shortage of homes suitable for retirement, fees and high property prices are the major reasons deterring some older homeowners from downsizing.

60% of those who plan to downsize to raise funds will use it to improve their standard of living. Nearly half (47%) will use the cash for travelling more. While interestingly, 13% want to release equity to help their children buy a house.

Interestingly, these figures do not comply with the common theory of ‘my house is my pension’ although there is a large number of people releasing equity from their homes to boost income in retirement. Most have accepted that the main reason that they need to move home is purely for convenience.

With the average amount of equity raised likely to be just over £100,000, and with many other demands on this cash – such as helping children, paying off outstanding debts and allowing for funds to potentially pay for care in the future – it is clear that for most people the best way to fund retirement is through saving as much into a pension as early as possible.

To learn more about how to maximise the return on your pension or if you are considering making major financial decisions, such as selling your home, in the run up to retirement you would benefit from an Initial Meeting with one of our advisors. For more information please call 01489 877547.

Disclaimer

Your capital is at risk. Investments can fluctuate in value and investors may not get the amount back they invest. Past performance is not a guide to future performance. Tax rules can change at any time.

 Please remember your home or property may be repossessed if you do not keep up repayments on your mortgage.  We give clients the option to pay for mortgage advice by fee rather than commission. Equity Release refers to lifetime mortgages. To understand the features and risks, ask for a personalised illustration.

 The Financial Conduct Authority do not regulate, Will Writing, Buy to Let Mortgages, Auto Enrolment, Tax Advice and Estate Planning.

 The opinions contained within this blog, do not constitute financial advice and no action should be taken based on this content alone.

 

Jasmine has been a qualified Financial Planner since 2008. She has also been a member of the Society of Will Writers since 2012. She is passionate about helping Clients build their wealth and achieve the financial lifestyle they desire. Her areas of expertise are that of Savings, Investments, Pensions and Retirement Planning.

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Redwood Financial Family Wealth & Estate Planners Ltd is Directly Authorised and regulated by the Financial Conduct Authority. FRN number 774469.

Disclaimers

The Financial Conduct Authority do not regulate, Will Writing, Buy to Let Mortgages, Auto-Enrolment, Tax Advice and Estate Planning. Your capital is at risk. Investments can fluctuate in value and investors may not get the amount back they invest. The guidance and/or advice contained within the website is subject to the UK regulatory regime and is therefore primarily targeted at customers in the UK. https://register.fca.org.uk/

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Registered Office Address: Wellesley House, 204 London Road, Waterlooville, Hampshire,