Using Property For Retirement Gives £43.50 A Week
By Alison Steed
RETIREES relying on their property for their pension could be disappointed, as the average amount released from downsizing a home will give you just £43.50 a week to live on.
This is down from £53.40 you could have achieved in 2008 thanks to the falls in property prices, according to research from insurer Standard Life. The best you could achieve – by moving from a detached home to a bungalow – would be £71 a week to live on, but it could be as little as £4 a week if you move from a semi-detached property into a flat.
Andrew Tully, Senior Pensions Policy Manager, Standard Life commented: “People pinning their retirement dreams on downsizing their property will be in for a shock. A combination of a fall in house prices and annuity rates has dealt a double blow to many, with the average pension pot from downsizing only providing £43.50 a week income. Banking on downsizing to generate sufficient income is a potential retirement disaster unless you have also made provision elsewhere.
“Our recent research shows many people are still pinning their hopes on using property to generate their retirement income, favouring this asset class over savings accounts and pensions. However, our analysis shows many people need a reality check to get their long-term financial planning back on track. The old adage of not putting all your eggs in one basket has never been more appropriate.”
The average detached home in the UK is valued at £290,208, according to the Halifax House Price Index. If the owner decided to downsize to a bungalow, with an average UK value £192,373, allowing for moving costs of £1,924, the equity released could provide £71 a week retirement income.
There are significant differences in the amount of income available through downsizing:
Regional data – weekly income generated through downsizing by property type.
| Detached to bungalow | Detached to semi-detached | Detached to flat | Semi-detached to flat | Terraced to flat | Bungalow to flat | |
| UK Average | £71 | £90 | £95 | £4 | £6* | £23 |
| North | £55 | £73 | £98 | £25 | £10 | £42 |
| Yorks & Humb | £53 | £76 | £103 | £26 | £7 | £49 |
| North West | £57 | £72 | £102 | £28 | £0 | £44 |
| E.Midlands | £46 | £71 | £91 | £20 | £9 | £43 |
| W.Midlands | £44 | £87 | £113 | £26 | £7 | £68 |
| E.Anglia | £64 | £79 | £109 | £29 | £18 | £69 |
| South West | £60 | £93 | £131 | £36 | £18 | £69 |
| South East | £121 | £129 | £188 | £57 | £27 | £65 |
| Gt. London | £158 | £134 | £200 | £59 | £28 | £36 |
| Wales | £57 | £80 | £101 | £20 | £4 | £43 |
| Scotland | £37 | £68 | £86 | £16 | £3 | £47 |
| N.Ireland | £42 | £53 | £61 | £9 | £20* | £15 |
* Flat to terrace property
Source: Standard Life
