New research from Retirement Advantage, the retirement specialist, suggests the UK’s property market may receive a welcome boost from retirees moving house in a bid to bolster their income in retirement.
The firm’s survey of over 50s reveals that a quarter (26%) plan to move house when they retire. Of these, almost two thirds (62%) plan to downsize, while four in ten (38%) will move to a different area. The majority (63%) of those looking to move to a smaller property are doing so to generate cash for living expenses in retirement, while one in ten (10%) want to help children with house deposits.
Given over 50s hold more than two thirds of the UK’s overall property wealth, worth around £2,291 billion, their plans will have a significant impact on the housing market. Plans to move are highest in London (32%), followed by Yorkshire (30%) and East Midlands, South West and South East (all 29%).
Andrew Tully, pensions technical director at Retirement Advantage, said: ‘With the UK housing market showing signs of slowing, questions have been raised over how we can find supply to match demand. This research shows retirees may hold the answer.
‘Those approaching retirement are thinking holistically about their finances, and considering property as part of their asset mix. Many will choose to move house so they can use the capital generated to fund the initial stages of retirement, rather than immediately relying on pensions and other savings. It can also make financial sense for retirees given recent regulatory and tax changes around property and pensions.
‘However, moving house is an expensive business and people are often shocked by how little money is left once they’ve paid for their new house as well as the fees and taxes associated with moving. It’s important over 50s understand there are other ways to use their property to fund retirement. Equity release, for example, allows people to access some of the cash stored up in their home, without needing to move. It is vital people get professional financial advice so they are fully aware of all their options and can get the best outcome in retirement.’
Helpful Resource Depending On Your Requirements