Retired homeowners have seen their property wealth grow by more than £12.5 billion in the past three months as house prices continue to climb earning the average pensioner nearly £900 a month, a new report from over-55s financial specialist Key Retirement shows.
Pensioners who own their homes outright have gained an average of £2,680 each from their houses in the past three months taking their property wealth to a new record high.
In the five years since Key started monitoring the housing wealth of the over-65s, in January 2010, total pensioner property wealth has increased by 12% or £93.85 billion which equates to £20,000 on average for every homeowner.
Its Pensioner Property Index shows over-65 homeowners now own property wealth of £873.77 billion outright with pensioners across almost all of the UK benefiting.
The growth in property prices will drive expansion of the equity release market which enables homeowners to release wealth from their homes – Key’s figures showed.
Retired homeowners in London were the biggest winners gaining an average of around £16,260 each in the past three months, while homeowners in Scotland are more than £8,650 better off and pensioners in Yorkshire & Humberside are £4,063 better off.
However retired homeowners in Wales saw a fall in housing wealth with average losses of £2,230 in the three months while the North West and West Midlands also saw house price falls.
. Nearly two-thirds of pensioner property wealth is concentrated in London, the South East, the South West and East Anglia.
A spokesman for Key Retirement, said: “Retired homeowners have huge assets in their houses with total property wealth hitting another all-time high of £873 billion highlighting the growing importance of housing for retirement planning.
“No matter what happens in the property market homeowners will always have a major asset which should be considered as part of retirement planning. Innovation in the equity release market and the launch of pension freedoms are opening up more ways for homeowners to use their property wealth.
“Retired homeowners, and those approaching retirement, should take advice on how their property wealth can generate additional capital and/or income. Advisers and lenders need to focus on a holistic approach to retirement planning which ensures that property wealth is considered alongside pension savings and other investments.”
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