Older homeowners consider pension funding options
16th August 2016
This news article is from Handicare UK. Articles that appear on this website are for information purposes only.
A survey has revealed that older homeowners would only consider using their home as a source to fund their pension as a last resort, or not at all.
The research conducted by Aegon, who provide retirement and workplace savings and protection solutions, showed that 74% of participants wouldn’t want to use their property as a means for pension funding.
Pensions director at Aegon, Steven Cameron, told What Mortgage: “Our research shows that people view the value in their home and the funding of their retirement very separately. It’s encouraging that people are not setting out to rely on equity in their home as a silver bullet to solve a lack of pension saving. And with the right planning and saving behaviours it can probably be avoided.
“However, those who don’t plan ahead and realise too late that their house is by far their most important asset, may be forced into making some very difficult decisions.”
For older people it is easy to see why so many would be against putting up their family home to support pension funding. Many individuals take residence in their properties for many years with, memories and investments such as rise and recline chairs and stairlifts supporting a happy and independent retirement.
Cameron added: “When pushed 69% said they’d look to buy something smaller although it would require substantial downsizing to release enough to generate any significant income for life. There was almost no appetite for moving in with family (3%) or renting out a room (3%). And moving into a retirement home (5%) was only marginally less unpopular.”
More than half of people (53%) would leave their property to their loved ones and a significant amount said that moving in to live with family during retirement was very unappealing. On the other hand, only four per cent of the participants would consider their home as the main source of their pension and retirement income.