Could rising house prices help close the pension gap for future retirees?
Poor pension funds and rising house prices mean that many workers plan to use money from their homes to fund their retirement.
This is indicated by a Legal & General Home Finance survey which found that 22% of people who plan to retire will unlock their real estate wealth to provide income when they finish their jobs.
According to a survey of 4,000 future retirees, a third of people who are not currently retired own property but have less than £ 10,000 in savings in their kitty.
In addition, 22% of people have no pension savings.
And Legal & General said the large number of small and empty jars, coupled with soaring house prices in England and Wales, means many will have to look to their property to pay for their retirement.
Options for unleashing real estate wealth may include subsequent life loans, such as freeing up equity or downsizing.
Claire Singleton, CEO of Legal & General Home Finance, said: “The significant increase in house prices in recent years has likely changed the expectations many people have about the role that real estate wealth will play in supporting their retirement over time.
“We predict that using your home to fund your retirement will become more common in the future, whether that’s downsizing to free up funds or freeing up money tied up in your home through products like mortgages for life. “
According to Legal & General, the average homeowner could access more than £ 72,988 in equity release, off current house prices in England and Wales.
In the survey, 10% of those polled said they expected to downsize, 9% planned to sell their property, and 6% would gain access to equity using a lifetime mortgage.
Claire added: “It’s never too early to start thinking about how you plan to finance your retirement and seek the right advice to get your affairs in order, and for many homeowners, their property. could be the key to getting the lifestyle they want.
“Our results also show that a large number of people who are currently retired may have limited income and could benefit from the likely increase in the value of their home.
“It is important that we address the discomfort some people still feel about using money from their homes to help them achieve better financial results in retirement. “