Over 55s

Nearly 4 million homeowners over 55 plan to downsize

More than 3.9 million over-55s are planning to downsize to a cheaper property, according to new research from Prudential.

The nationwide study found that 47% of homeowners aged over 55 were planning to sell and move to cheaper homes later in life, and on average they expected to raise around £112,000 in equity, with 11% expecting to make more than £200,000.

However, Prudential found that money wasn’t the key driver for downsizing, with 74% citing convenience as the main reason, compared with 28% who claimed they were doing so mainly to release cash for retirement.

“It is interesting to see that these figures challenge the common theory that ‘my house is my pension’,” said Vince Smith-Hughes, a retirement income expert at Prudential.

“Although we see a large proportion of those taking equity from their homes to boost their retirement incomes, most people have accepted that the main reason they need to move home in later life is for convenience.

“With the average amount of equity raised likely to be just over £100,000, and with many other demands on this cash – such as helping children, paying off debts and putting money aside to pay for care in the future – it is clear that for most people the best way to fund retirement is through saving as much into a pension as early as possible in their working lives.”

However, a lack of suitable, available housing was the main reason why over-55s felt downsizing wasn’t more popular, with 24% blaming the cost of moving and 17% citing high house prices.

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