The UK can no longer treat housing and pensions as separate policy issues if it hopes to solve the growing retirement adequacy crisis, according to a new report by the Society of Pension Professionals (SPP).
UK retirees currently hold an estimated £3.84 trillion in housing wealth, yet face an aggregate annual retirement income deficit exceeding £48 billion.
Furthermore, many current retirement planning models rely on the outdated assumption that most individuals will retire mortgage-free. With declining homeownership rates and a sharp rise in lifelong renters, who require an estimated £269,000 more in pension savings to cover rental costs, the current system is leaving millions unprepared.
The SPP warns that fragmented advice, separate regulatory regimes, and tax barriers like stamp duty prevent people from making holistic decisions about their wealth.
Key recommendations contained with the SPP’s “Home Truths” paper include merge housing wealth into mainstream later life advice platforms such as MoneyHelper and Pension Wise to break down regulatory silos between mortgages, equity release, and pensions.
It is also calling for updated retirement metrics, revising the Retirement Living Standards and Value for Money (VfM) frameworks to explicitly account for rental and mortgage costs in later life.
The SPP wants the government to explore a one-off stamp duty relief for older downsizers alongside a significant expansion of age-appropriate retirement housing, and build standardised housing investment vehicles to channel pension capital into residential development and boost housing supply.
In addition, the report explores ways to support younger savers, including opportunities to restructure employer matching contributions so younger savers can accumulate home deposits without raiding their core pension pots.
Finally, the SPP suggests exploring mechanisms to acquire family homes liquidated to pay for social care and use pension capital to retrofit them into social housing.
Amanda Cooke, chair of the SPP Financial Services Regulation Committee, said: "Pensions and housing draw on the exact same household resources, yet policy treats them as completely separate worlds. While current retirees often rely on property equity to mask savings shortfalls, future generations facing high rents and lower homeownership rates simply won't have that cushion.
"We need an integrated approach, one that unifies guidance, updates living standards to reflect real housing costs, and unlocks institutional pension capital to help build the homes the UK desperately needs."
