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Property vs pension: Over 65s hold nearly five times as much wealth in property than pensions

Posted in: Research

  • The average pension savings at retirement is worth £28,000[i]
  • However, one in eight people retired without any pension savings in 2018[ii]
  • Over 65s-year olds have £1.6 trillion in property wealth, either in the home they live in or additional properties
  • Using equity release homeowners can release up to 50 per cent of the value in their property to fund retirement
  • For every £1 in pension savings, over 65s have £4.70 in property wealth

Analysis by OneFamily has revealed that over 65s have nearly five times as much in their property than their pensions savings[i], with £1.6 trillion held in property wealth, compared to £336 billion held in retirees’ pensions.

At a time when the average retirement lasts 18 to 20 years[ii] and with an expected income of £24,000 needed a year[iii], if retirees have no other savings, the average pension will last less than two years[iv], even when taking into account state pension payments.

With an increasingly large shortfall in pension savings, many homeowners are turning to alternatives such as using their property wealth as a source of income. A fifth of over 50s (19%) plan to use property to fund their retirement – as they downsize, make buy-to-let investments and unlock the capital in their homes through lifetime mortgages[v].

Lifetime mortgages are becoming an ever more popular way to fund retirement, and in 2018 nearly £4 billion in equity was released, up from £3.06bn in 2017[vi].  A lifetime mortgage allows homeowners over the age of 55 to take up to 50 per cent of the equity in their property as a loan. With £1.6 trillion held in property, that is up to an additional £800 billion that could be used as retirement funding.

It is also increasingly easy to manage interest on these loans, like the ones offered by OneFamily, which have the option to make payments either monthly or as and when they wish. Homeowners can choose to pay either to up 100% of the interest, meaning only the original loan amount would be left at the end, or up to 10% of the capital each year.

Nici Audhlam-Gardiner, Managing Director of OneFamily Lifetime Mortgage comments,

“As these number show a pension of £28,000 is likely to only last a couple of years and retirees need to look to new sources outside of their pensions for retirement funding. With the value of property having risen over many years, it’s no wonder that homeowners are turning to this source of income to fund their later years. Traditionally properties were only used to fund retirement by downsizing, but buying second properties for rental income, and increasingly lifetime mortgages means homeowners have more options to make up the shortfall from their pension savings.”

For more information visit:

[i] Opinium Research – A review of the pensions landscape in 2017
[ii] Prudential Class of 2018
[i] Pension wealth in total is £28,000 (Opinium 2017) x 12,012,000 = £336,336,000,000 or £336 billion, Property wealth is £1,600,000,000,000 or £1.6 trillion (Savills property report) The difference between the two is £1,263,664,000,000 or £1.2 trillion
[ii] a 65-year old man in the UK has an average of 18.5 more years of life ahead of him, while women of that age will live on average for another 20.9 years, according to the most recent data from the Office for National Statistics.
[iii] OneFamily research October 2017, expected yearly retirement income is £24,000 year
[iv] State pension is £164.32 x 52 = £8,500, each year from a state pension. £24,000 – £8,500 = £15,500. £28,000 / £15,500 = 1.8 years
[v] OneFamily research October 2017
[vi] Equity Release Council figures December 2018