Property pensions are the main retirement saving option for homeowners approaching retirement, according to new research.
Nearly half of over 50s believe they can unlock cash to help fund their retirement by downsizing, while another 17% are relying on equity release to boost their pension pots.
However, many are overestimating the value of their homes, says pensions and financial firm LV=.
Although nearly 40% agree an average £21,749 has been lopped off the value of their homes during the past three years, 18% of working over 50s will wait for their property value to improve before considering drawing on the equity, while another 9% plan improvements to try to up the value.
Despite housing market uncertainty, more than half (54%) of working over 50s with families would recommend their children invest in property to fund their retirement.
The question about how they will fund their own retirement received a muddled response:
● More than a third (35%) of working over 50s confess they will delay their retirement for financial reasons, with an additional fifth (20%) looking at ways to boost their retirement income before they retire such as taking a second job or taking in a lodger.
● One in seven (14%) will be retiring when they planned, but will take a lower income in retirement than they originally thought they would.
● One in six (16%) would rather not think about their retirement finances at all.
Vanessa Owen, the firm’s head of equity release said: “Turbulent times are still ahead for the UK economy, but despite the uncertainty surrounding the housing market our HIPpies generation have not been discouraged.
“The number of over 50s planning to use their home as their pension has remained stable when we compare it to our 2011 report. A property is often the largest asset people have, so it makes sense for them to see it as a way of helping to provide an additional stream of income for them when they retire.”
