October, 2017
New research from life insurance company, Prudential, indicates that almost half (47%) of UK homeowners aged 55 and higher are planning to downsize.
In total, more than 3.9 million Brits will be on the move during their later years, and on average, will be walking away with around £112,000 in equity.
One in ten (11%) expect to make more than £200,000, and a staggeringly high one in seven (13%) state that without downsizing, they could not afford to retire.
When asked what they planned to do with the equity raised from downsizing, 60% of respondents answered that they would use it to increase their retirement funds, 47% were planning to use the cash for travelling, whilst 13% wanted to help their children buy a house.
For the majority of respondents, however, the main driving force for this lifestyle change is not for financial purposes.
From Prudential’s study, it seems that only 28% of downsizers are moving to secure more money for their retirement. Whilst nearly three-quarters (74%) answered that convenience was more important to them, with one in three (34%) stating that having a smaller, more manageable garden was a major motivation.
Across the UK, Northern Ireland appears to be the region with the highest number of over-55s who are looking to downsize (63%), closely followed by the East of England (60%).
Whilst Prudential found that those least likely to downsize live in London (41%), Scotland (45%), and the West Midlands (45%).
In response to the unexpected preference for convenience over profit, Prudential retirement income specialist, Vince Smith-Hughes, had this to say, “it’s interesting to see that these figures challenge the common theory that ‘my house is my pension’.”
According to Vince, selling your property to free up cash may be appropriate in some cases, but it should never be seen as a substitute for saving for retirement.
If you would like any advice regarding your downsizing options, please don’t hesitate to get in touch.
