Recent research has revealed that one in five people aged 50 or over are relying on property wealth to fund their retirement.
According to OneFamily, 15% of retirees use property to as a way to boost their income; a proportion which is set to grow to 22% over the next ten years.
During the last quarter of a century, house prices have grown by over 300%, with the average property owner in the over 50s demographic owning a home worth £225,000 or more. This equates to around £2.3 million of the total UK property wealth, which currently stands at approximately £2.3 million.
The research revealed that for over 50s, the most commonly cited way to fund retirement through property was investing in buy-to-let, accounting for third of the income of those planning to do so. Downsizing was in second place; of those planning to move to a smaller property, it accounted for 28% of retirement income. Taking out a lifetime mortgage accounted for the same proportion.
Of the over 50s who do intend to use property as an income booster in retirement, 26% state that investing in property is more reliable than a pension, whilst 27% state that the value of their property is above that of their pension.
Although the proportion of retirees planning to use property as a way to supplement their income during retirement, the results of the survey also found that many of those asked are let to look into the full range of options in terms of financially planning for the future.
Commenting on the results of the study was Nici Audhlam-Gardiner. The Managing Director of OneFamily Lifetime Mortgages said: “It’s clear from the research that homeowners are seeing their property as a cash cow to fund their retirement, and with the dramatic house price rises we have seen, investing in property seems like a wise option. This is particularly true as we see income from pensions, both state and otherwise, beginning to decrease.
“Those not taking advice may often not realise that as well as downsizing there are other options to fund your later years, whilst saying in your forever home.”
