Some 75% of this age group own their properties outright and the average home owner aged over 65 has lived in their property for 25 years, the research from retirement specialist LV= also shows.
The value of the average property owned by working over 50s is £258,000, more than £15,000 higher than the national average of £242,000. For many unlocking the capital in their home would provide them with a significant income boost and the firm says that the increase in people using their properties to fund their retirement is likely to have been driven by increasing house values over a long period, and low interest rates on savings.
As well as building up equity in their homes, over 50s have spent an average of £30,000 each creating their perfect home, in the two decades they have lived in their property. Having made such an investment, 38% want to stay in their current home for the rest of their lives, and this figure rises to 47% of all retirees.
Indeed it's not just their home that they love. Of the 9.6 million British home owners aged over 50 some 88% feel a strong connection to where they live and consider themselves a part of the fabric of the community in which they live and 39% would miss their friends if they were to move.
‘The number of over 50s who plan to use their home as their pension has risen steadily since we first launched our report in 2010 and it is clear that for a large section of the population their home is will play a key role in funding their retirement,’ said Vanessa Owen, head of annuities and equity release at LV=.
‘Property is often the largest asset someone has when they reach retirement, especially if they have lived there for quite a while, and will often significantly outweigh any pensions savings they have. As our report shows, having invested a considerable amount of time and money in their property, many would prefer to stay where they are and access the cash tied up in their home without having to move,’ she added.
The research also looked at the reasons why over 50s are set to unlock the cash tied up in their property. Some 53% said to supplement their retirement income, 17% to fund their own care costs, 13% to help children or grandchildren with financial costs such as school fees, 10% to make improvements to their home and 8% to buy a luxury such as a sports car.
The report shows that the economic situation has also impacted on the retirement plan of many over 50s in the workplace, with just 26% on track to retire as they planned when they initially thought about their retirement. Some 13% will still retire at the time they originally planned, but on a lower income, 26% are having to delay their retirement for financial reasons and a further 13% are not thinking about their retirement finances.
Despite the economic uncertainty it is clear that many consider a bricks and mortar investment to be as safe as houses. Some 84% of over 50s say their property has either maintained or increased in value in the last three years and only 10% of respondents say that they are currently worried that property prices will drop.
It is clear that property is viewed as an effective way of planning for retirement and 52% would recommend that their children invest in property to fund their retirement. Pensions were the only saving vehicle that proved more popular, with 53% saying that they would recommend their children prepare for retirement by investing in a pension.
‘With people spending longer in retirement one of the challenges that many need to overcome is how to fund it and how to meet the financial demands they may face in later life, such as the cost of long term care,’ said Owen.
‘There are numerous ways that retirees can access the capital tied up in their home including deciding to downsize or take out an equity release plan. For those considering unlocking the money in their homes it's important to seek professional advice and explore all of the options available in order to find the best solution for them,’ she added.
