Older households depend on their property pensions to pay the bills and fund their retirement lifestyles, according to new research.
Property wealth in the UK has now reached more than £4 trillion, making 40p of every pound in the wealth of over 65s, rising to 47p in the £1 for those over 75 years old.
A shift in the way older property owners regard this wealth is taking place, says the Equity Release Council, the trade body for later life lenders.
Just over half of homeowners aged over 45 (51%) include money tied up in property in their financial plans.
Picture of property wealth
The research also found 44% felt taking out an equity release loan was a common option for managing money in retirement, while 40% considered later life borrowing as part of the aging process.
Many like to keep the money in a bank as cover for unexpected expenses, while others like to pass their wealth to relatives and loved ones before they die.
The report gives a picture of UK property wealth and shows homeowners, particularly in the 45 to 64 year old age group, are reassessing their views about equity release.
A third see the money invested in the property they own as a vital part of the retirement finances, while one in four want to access the cash to help family and loved ones, and one in three want the money to help pay for care costs.
David Burrowes, chairman of the Equity Release Council said: “The UK’s ageing population and changing retirement landscape means people are increasingly thinking of property as a multi-purpose financial asset – particularly those aged 45 to 64, the retirees of tomorrow. Property is often a person’s single largest asset and makes a significant contribution to homeowners’ personal finances as well as providing a place to live.
“Changing attitudes to property are significant given the financial challenges facing our ageing population as they seek to live longer, healthier lives. Many people have made inadequate provision for their retirement and care needs, while others have younger family to support. Consequently, bricks and mortar have become a vital piece of the retirement funding jigsaw, to benefit people during their lifetime as well as their families.”