Andrew Tully, senior pensions policy manager, Standard Life, commented: "People pinning their retirement dreams on downsizing their property will be in for a shock. A combination of a fall in house prices and annuity rates has dealt a double blow to many, with the average pension pot from downsizing only providing £43.50 a week income. Banking on downsizing to generate sufficient income is a potential retirement disaster unless you have also made provision elsewhere."
Tully continued: "Our recent research shows many people are still pinning their hopes on using property to generate their retirement income, favouring this asset class over savings accounts and pensions. However, our analysis shows many people need a reality check to get their long-term financial planning back on track. The old adage of not putting all your eggs in one basket has never been more appropriate."
The research showed:
• On average, downsizing a home in the UK will provide only £43.50 a week retirement income, compared to £53.40 in 2008
• This reduction is due to the fall in property prices, combined with reduction in annuity rates
• Moving from a detached house to a bungalow will potentially generate £71 retirement income a week, compared to £100 in 2008
• Moving from a semi-detached home to a flat would only provide £4 a week
• There are significant regional variations - Yorkshire and Humberside, the North West and the West Midlands have been most affected by the fall in property prices
