Over 50s rely on homes as pension pots
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Many over-50s are still planning to release money from their home to help fund their retirement, despite thousands of pounds being wiped from their property values.
LV= carried out research with more than 4,000 over 50-year-olds and found that 9% of those polled plan to use the equity or value of their home to help fund their retirement, either through trading down or taking out an equity release plan.
A further 18% say they would consider using their home to support their retirement.
Yet the home owners surveyed also estimate that on average £27,250 has been wiped off their property value in the last two years.
In total home owners over 50 believe they have lost £80bn in property value due to recent housing market falls.
But only 2% say have been turned off the idea of using their home to fund retirement, while a further 11% plan to take advice on unlocking the value of their home before they retire.
The research also found that one in eight home owners, or 12% of respondents, have consciously saved less into traditional pensions because of the perceived spiralling value of their home.
Another 13% say they couldn’t afford to buy their own home on top of investing in traditional pensions because house prices were so high.
Vanessa Owen, head of equity release at LV=, says: “In the decade leading up to the credit crunch, more and more home owners saw their property as a potential cash cow to aid retirement.
“But in a matter of months millions of pre-retirees have seen both their property and pension fund values battered.
“Despite this, their confidence in the long-term value of bricks and mortar remains.
“House prices still have some way to go before full recovery but with increases for seven consecutive months now, home owners are feeling more confident that their home can still play a big part in helping to finance their retirement.”
