According to Age Partnership, over-55s in England are currently sitting on £1.2 trillion worth of property wealth. In the next twenty years, this is forecast to more than double (105%) to £2.5 trillion, if property prices in the UK rise by a modest annual average of 2%. Even if house prices remain completely flat, the housing wealth of over 55s is forecast to increase by 38% to £1.7 trillion by 2035.
The 15.9m people in England currently aged 55 or older is expected to rise by over a third (33.8%) to 21.3m by 2035 as people increasingly live for longer. This compares to a much slower growth of 10.8% for the population of England as a whole.
Simon Chalk, equity release expert at Age Partnership, commented:
“We are witnessing a radical long-term shift towards people reaching retirement age with a hugely significant nest egg in the form of property wealth. In twenty years’ time, people at or near retirement could be able to tap into a combined extra £1.3 trillion of property wealth to help fund their retirement.
“Many baby boomers currently reaching retirement age are fortunate enough to have amassed both property wealth and a sizeable pension. But for those whose pension savings aren’t sufficient to fund the retirement lifestyle they want, their housing wealth can be used to top up their pension income or help fund major purchases. As the number of people retiring with generous defined benefit pensions declines over the long-term, housing wealth could become even more important in retirement planning in twenty years’ time than it is today.
“Over 55s who want to tap into their housing wealth to fund their retirement lifestyle have two options. Downsizing to a smaller or cheaper property can free up their wealth. But many don’t want to move or can’t find suitable housing to downsize to. For people who can’t or won’t downsize, equity release can be a powerful tool to tap into a share of their property wealth – large or small."
