‘Downsizers can give their retirement funding a real boost’

Primarily, those who took advantage of the boom in homeownership in the latter part of the 20th century have reached the point where they have paid off their mortgage debt.

According to a press report I’ve read this week, older generations have more than £2.5 trillion in equity tied up in property, which could be accessed to help fund retirement or to help children or grandchildren get onto the housing ladder.

By moving to a property that better suits their needs, downsizers, particularly those in high-value locations, can give their retirement funding a significant boost, which could be vital in the face of rising living costs.

Statistics suggest there are more than 1.29 million owner-occupiers, aged 65 and over, living in larger (typically four-bedroom) homes. Moving to a smaller (two) bedroom home that may now be a better fit, could unlock an average £305,090.

Bearing this in mind and based on an average life expectancy of 20 years for those aged 65, downsizers could provide themselves with a tax-free income of £1,218 a month for the rest of their lives.

Understandably, homeowners have traditionally been reluctant to downsize given their attachment to the former family home, but it is becoming increasingly commonplace for people to look at their home as a way of supplementing their pension provision.

To make the most efficient use of our existing housing stock, there needs to be a change in attitudes to downsizing, not just among individuals but also among policymakers.

While housing policy initiatives tend to focus on getting younger generations onto the housing ladder, we also need to look at financial incentives for downsizers to free up stock, as well as greater provision of retirement housing that better suits the needs of active downsizers and that the older generations aspire to live in.

Chris Willey is an Independent Property Appraiser and welcomes sale related enquiries on 01823 412661.