Two thirds of UK home owners consider using property as part of their retirement, research shows
Some two thirds, 73%, of people in the UK would consider using housing equity as part of their later life finances, according to The Equity Release Council.
Indeed by 2017, more than a quarter of a million, some 257,168 retirees will consider downsizing and 59,347 will look into equity release, its latest research shows.
It highlights the fact that while some of today's pensioners might be able to rely on income from pensions, investments and benefits, going forward more and more retirees realise the critical role their property will play in retirement.
The research, undertaken to coincide with the launch of The Council, formerly SHIP, reveals that while expected reliance on property decreases with age as people build up other assets, over half, 55%, of today's 55 to 64 year old still believe it will play some part in their retirement finances.
And for younger groups it is even more. Some 93% of 18 to 24 years olds intend to consider using property to fund part of their retirement, 82% of 24 to 34 year olds, 69% of 35 to 44 year olds and 63% of 45 to 54 year olds.
The most common way that people would consider accessing the value in their homes would be via downsizing with 45% considering this option, followed by 10% considering renting out a room and 7% considering equity release.
In practical terms, this means that in 2017 over 59,000 retirees will be looking at what role equity release can plan in their retirement financing.
Those who have a second property such as a buy to let investment or holiday home might consider renting out the property for income with 17% in favour of this option while 7% would consider selling the property if they needed to improve their retirement finances.
When asked to list what they thought would be the top sources of income in retirement, an employer pension was top with 44%, a private pension with 39% and savings and or investments with 36%. However, overall 61% said property would be one of the top sources of finance in retirement.
When these figures are considered against population projections, it suggests that by 2017 more than a quarter of a million people will consider downsizing and 59,347 will look into equity release.
The Council said that this is a conservative estimate as 27% of people between the ages of 18 and 65 say they feel benefits will be one of their top three sources of income in retirement, something that is unlikely with the current Government stance.