Millions of UK homeowners heading for a retirement income shortfall are sitting on substantial housing wealth they are not yet accessing, according to new research published by Fairer Finance.
The independent consumer group is calling on government, regulators and the wider industry to work together to help people make better use of their housing wealth in retirement.
The second Pensions Commission’s interim report found that 15 million people are currently under-saving for retirement, yet 75% of households aged 55-79 are homeowners.
Last year, Fairer Finance modelling found that by 2040 half (51%) of UK households aged 60+ could benefit from accessing their housing wealth to support their spending needs in later life - contributing £21bn to the UK economy.
The new modelling suggests that 65% of single women homeowners aged 55-79 will have a retirement income below the Pensions UK moderate living standard (£31,700 per year for singles and £43,900 for couples, net of tax), yet they hold on average £225,000 in housing wealth.
The pattern holds across household types: 44% of single men homeowners face the same scenario (also with average housing wealth of £225,000), as do 37% of couples (who hold an average of £275,000). Despite owning significant assets, millions are not drawing on them to close the gap.
In total, 3.7 million homeowner households aged 55-79 will have retirement income below Pensions UK moderate. This is 46% of homeowner households aged 55-79. 1.8 million homeowner households aged 55-79 have £200,000-400,000 of housing wealth, and a further 650,000 have at least £400,000 of housing wealth.
High awareness points to a wider engagement opportunity
Fairer Finance found that 70% of homeowners aged 55–79 were aware of equity release, yet only 13% had previously ever considered taking a lifetime mortgage. Since 1991, more than 680,000 homeowners have accessed over £50bn of property wealth through equity release6.
When it comes to supplementing their pension income in future, 58% of homeowners aged 55-79 said they’d reduce spending or adjust their lifestyle, 38% would downsize to a cheaper home and 28% would continue/return to work. In comparison, just 14% would explore utilising their property wealth.
The research suggests the key barrier is not awareness, but engagement and understanding: many people never take the first step to explore how housing wealth could support their retirement options.
Policy recommendations
The research renews Fairer Finance’s five recommendations from its 2025 report, calling on government and regulators to:
• Substantially increase the supply of suitable, desirable retirement properties in the communities where older people wish to live.
• Lower the financial cost of downsizing by reducing stamp duty for people in later life.
• Normalise the use of housing wealth to maintain living standards in retirement.
• Develop a personalised service that brings pension and housing wealth into a single view.
• Reform FCA regulation around later life advice to break down silos and ensure consumers can maximise all their assets as they approach retirement.
Tim Hogg, director of Fairer Finance, said: “It’s important to help people save more into their pensions, but if we focus on pensions alone then we overlook a major asset that millions of households already hold. Our research shows that huge numbers of people heading for a retirement income shortfall are sitting on significant housing wealth which could bridge the gap, if they want it to. The picture is particularly stark for single women, who face the highest risk of low living standards in retirement, despite often owning homes worth hundreds of thousands of pounds.
"Silos in regulated advice markets mean many people are not presented with all their options for borrowing in later life, and many don’t see downsizing as a viable option because there is a lack of desirable retirement housing. Tackling these barriers will help millions of people improve their living standards in later life. We need policymakers, regulators, and firms to work together to overcome the barriers that are preventing people from seeing their pension and their property as part of the same financial picture.”
Jim Boyd, chief executive of the Equity Release Council, added: “Following the Pensions Commission’s recent warning that 15 million people are under-saving for their retirement, Fairer Finance’s research explains how housing wealth can provide a lifeline for our rapidly ageing population and transform retirement living standards.
“Despite property being the largest asset for homeowners, too often it is considered separately from pensions and savings and there is a lack of knowledge among consumers how property wealth can fund longer lives in retirement. Property wealth is currently not part of the mainstream retirement conversation and there is a lack of actionable advice around housing wealth, and retirement options are biased toward pensions with a real risk that this important asset is overlooked.
“As attitudes towards later life lending continue to evolve, it is vital that people can access clear information, appropriate advice, and products with strong safeguards, so they can make informed choices about what is right for their circumstances.
“The challenge to Government and regulators now is to create a system that helps consumers consider all their options in the round and use their assets more effectively to support financial wellbeing in later life. Failure to grasp this issue now may consign millions of people to poorer living standards.”
