More than a quarter (26 per cent) of UK pensioners expect to sell their property to raise funds for their retirement, according to new research from P…
More than a quarter (26 per cent) of UK pensioners expect to sell their property to raise funds for their retirement, according to new research from Prudential.
Close to three quarters (73 per cent) of all retirees in the country own their own home, but unfortunately due to debts and the rising cost of living, many are being forced to downsize.
Four in five (81 per cent) people who expect to sell are planning to buy another property and this is the equivalent to around one million homes being bought and sold by pensioners, many of whom will release substantial amounts of cash by downsizing.
The majority (73 per cent) who plan to sell up and buy another house want to move into a smaller and less expensive home. They expect downsizing to raise an average of £62,000.
Almost a quarter (23 per cent) plan to use the money raised to give their income a boost, while 13 per cent will pay off debts and eight per cent will be forced to put the money towards everyday living costs.
The research also revealed over one in five (22 per cent) retired homeowners still have an outstanding mortgage, with average monthly payments of £254. Downsizing would potentially reduce this monthly payment but any debts could hinder that goal.
Interestingly, the convenience of running a smaller home was the most commonly stated motivation for people, with 48 per cent claiming they want a simpler life. Some 22 per cent claim raising money is the main driver for their sale, while 11 per cent want to reduce household bills.
Stan Russell, retirement expert at Prudential, said: "Housing wealth is potentially a significant source of additional retirement income for pensioners who own their own home. This is why so many of Britain's pensioners are planning to become last-time-buyers.
"However, it is dangerous for people to assume that housing wealth can make up for a lack of retirement planning. To ensure a comfortable retirement it is important to start saving as much as possible as early as possible and to seek professional financial advice on the best retirement income options."
By Joe White