But many of these 'property-rich, cash-poor retirees' may be missing out on crucial benefits
New analysis of official government data has shown that retired households living on the lowest incomes have high rates of home ownership.
With this finding, advisor HUB Financial Solutions is encouraging retired homeowners to check if they are receiving their full entitlement to State benefits.
However, further research raised concerns that owning property may be deterring people from finding out if they are eligible for any state support.
The Office for National Statistics (ONS) split retired households into five groups – quintiles – by their annual income. Its data showed that four in five (79%) of retired households in the lowest income quintile are owner occupiers, a higher rate of ownership than those in the two higher income brackets.
The lowest quintile, which has an average gross income of £12,706, holds an almost similar rate of home ownership as those in the fourth income quintile (80%), despite people in that quintile having around three times as much gross income with an average of £35,514.
Around 67% of retired households in the 2nd quintile, and 69% in the 3rd quintile own their own home.
Research by HUB Financial Solutions revealed that many homeowners are deterred from checking their benefit entitlement because of the value of their property.
Nearly half of homeowners (46%) said they have never checked their benefit entitlement, with two in five (39%) saying it was because they assumed the value of their home meant they would not qualify for benefits.
Simon Gray, managing director at HUB Financial Solutions, said the figures suggest there is a group of ‘property-rich, cash-poor retirees’ struggling for income and perhaps unaware they could be entitled to receive benefits.
“Among working age households, home ownership levels increase in line with income, but among retired households, the figures indicate that those with the least and most income are more likely to be homeowners than middle-income groups,” he noted.
“That could be because during their working life, some people have prioritised paying off the mortgage over saving for retirement and now think that home ownership rules them out of receiving any State help. But that’s not necessarily the case and anybody struggling for income in retirement – whether they own their home or not – should make sure they are receiving their full benefit entitlement,” Gray pointed out.
He added that HUB Financial Solutions’ regulated advisers check the benefits position of every customer they talk to about releasing some of the value in their property and frequently find people are missing out.
He disclosed that half of those pensioner homeowners who were entitled to benefits last year were not claiming anything and losing out on £1,197 on average each year. Another two in 10 were claiming less than the full amount, with an average loss of income of £1,220.
“These are meaningful sums of money that could make a huge difference to people’s quality of life,” Gray said.
