People who are planning to retire in London are the most likely to use the wealth of their homes to boost their finances during retirement, a study shows just how many choose to use property wealth to increase funds available after retiring.
According to the study by Key Advice one in three people will look to improve their financial income by taking advantage of the value of their property. Some key findings include the following:
- Retirees in London have the largest amount of property wealth. On average, households who own homes have £661,900 available.
- People looking to retire in the South-East have the second highest property wealth in the UK.
- In comparison, people in East Anglia most often don’t choose to take advantage of property wealth in order to have a higher income available during retirement. Only 17% of those who are expecting to retire here will choose this option.
- The property value in East Anglia is about £426,400 on average.
- Of all regions, the North-East has the lowest number of property wealth at an average of £258,200.
- When considering the property wealth available to retirees in Great Britain on a whole, the average number theoretically available is £388,900, while only 30% will most likely choose to use it for their retirement.
Property wealth: Many may miss out due to a lack of awareness and misconceptions.
Many choose not to use property wealth in order to instead provide an inheritance to their family members. However, a good number of those who are about to begin retirement would like to avoid debt in later years and consider equity release as a way to increase their finances, which can have a significant impact on wealth during retirement.
“With people retiring this year owning homes worth an average of £388,900 and total property wealth of £142 billion there clearly is a lot of wealth that could be used in retirement", Will Hale, CEO at Key, spells out. “Many will not need to use their home as part of retirement planning, but it is worrying if people are not taking property wealth into consideration due to a lack of awareness of the options available to them or as a result of myths or misconceptions about products."
The available wealth stemming from property is not always immediately linked to the willingness to use it for retirement. While East Anglia has a higher average property wealth (£426,400), only 17% make the decision to use it. The East Midlands, which show much lower figures (£264,700), are much more likely to take advantage of this option (36%).
The choice depends on personal reasons and the available income, but allows retirees to take advantage of additional funding, which could improve their quality of life during retirement. While this can be a good option, it is always important to check all the details before choosing a financing option.
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