The ONS Household Wealth Index revealed that older people have far more money tied up in property than they do in pensions.
The report found that two-thirds (66%) of over-65 households – more than 6m individuals – have more £100,000 or more property wealth, but only 42% had more than £100,000 in pension wealth.
Stephen Lowe, Just Retirement’s group external affairs and customer insight director, said: “We live in a country where people have often prioritised buying a home and paying off a mortgage over building up a pension, so it’s perhaps not surprising to find property wealth outstripping pension wealth.
“However the consequences of that decision show up at retirement when people need to secure an income that can sustain them for many years.
“This is particularly true at a time when standard annuity returns have been squeezed to the point even a six-figure pension pot can’t meet people’s hopes for an adequate income. Yet many are sitting on considerable property wealth.”
Lowe urged those heading into retirement to seek professional advice in order to plan how best to deploy all their assets during retirement, to help secure the income they need and to prepare for uncertainties such as illness or care needs.
He said: “Equity withdrawal either through downsizing or equity release has the potential to help many of those homeowners in the ‘squeezed middle’.
“One in four (26%) of older households have pension assets worth between £20,000 and £100,000 but the figures suggest many of these same people will have property wealth of over £100,000.
“This gives them options and could be an important lifeboat during retirement.
“Advisers have played an important role in helping clients mitigate inheritance tax in the past but as recent surveys have shown, people are becoming less willing to sacrifice their own living standards to pass on money when they die.
“Moving forward there are good opportunities for advisers who can help people factor property wealth into retirement planning whether that is for income, care needs or inheritance.”
