Currently England’s over-55s own £1.2 trillion worth of property wealth, a figure which would more than double (105%) should UK prices house rise by a modest 2% per year.
The over-55s population will grow by a third from 15.9 million to 21.3 million in 2035 as life expectancies rise, while the post-war baby boomer generation is also nearing retirement age.
Simon Chalk, equity release expert at Age Partnership, said: “In 20 years’ time, people at or near retirement could be able to tap into a combined extra £1.3 trillion of property wealth to help fund their retirement.
“Many baby boomers currently reaching retirement age are fortunate enough to have amassed both property wealth and a sizeable pension. But for those whose pension savings aren’t sufficient to fund the retirement lifestyle they want, their housing wealth can be used to top up their pension income or help fund major purchases. As the number of people retiring with generous defined benefit pensions declines over the long-term, housing wealth could become even more important in retirement planning in twenty years’ time than it is today.
“Over 55s who want to tap into their housing wealth to fund their retirement lifestyle have two options. Downsizing to a smaller or cheaper property can free up their wealth. But many don’t want to move or can’t find suitable housing to downsize to. For people who can’t or won’t downsize, equity release can be a powerful tool to tap into a share of their property wealth – large or small.
“Equity release isn’t for everyone, but the explosion we are seeing in the housing wealth of the over 55s means that it will be an option that is available to more people than ever before.”
