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British pensioners are currently sitting on a property fortune of more than £751 billion - substantially more than the UK Government's annual spending.
The latest figures from the Homewise Pensioners Property Price Index (PPPI) shows that this figure went up by almost £7 billion during the first quarter of 2011, a collective increase of around £75.9 million every day.
According to PPPI, the nation's 3.9 million retired households have each gained on average around £21,282 in property value so far this year. In fact, retired households now make up 27% of the total value of owner occupied UK property, with 93% of these properties now owned outright.
The leading retired hotspots are the South East and the North West, with the North East having the fewest retired households. Despite having fewer retirees, retired households in the South West comprise 32% of the total regional property value, higher than the national average. Also bucking the national trend is the North West, where retired households are making up 30% of the total property value for the region.
Whilst this may look positive, when put into context alongside the £57 billion of pensioner debt (as revealed by Scottish Widows in August 2007) and the rising cost of living, the reality is far from rosy.
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RETIREMENT DREAMS COME AT A PRICE
Homewise warns that increasing life expectancy and the growing pressure on pensions and State benefits will mean that more people will need to work beyond their 65th birthday in order to achieve their retirement dreams.
Figures from Office National Statistics (ONS) show that over the past decade , an increasing number of people aged 65 and over remained in either part or full time work. In 2001, around 412,000 people aged 65 and over were in work, and this more than doubled to 870,000 in the last quarter of 2010.
Mark Neal, Managing Director, Homewise said: "Medical advances mean that life expectancy is increasing. It sounds like a retirement dream come true. But living longer means that we have more years in retirement to fund."In 1981, a 60-year-old man could expect to live another 16 years but by 2003 this had increased to 18 years. According to a report for the NHS in March 2011, average life expectancy is now 82 years old for females and 78 for males.
"The impact of an ageing population on State pensions and the huge deficits in many company pension schemes is putting further financial pressure on pensioners."
However, Homewise says that growth in the residential property market means that many people close to or beyond retirement age have a huge amount of equity in their homes which they could release to help fund their retirement. For some, this could mean the difference between working beyond 65 and retiring. The company estimates that the average retired homeowner has around £170,000 of equity in their home.
Homewise offers a free brochure, which can be obtained by calling FREEPHONE 0800 043 44 88. Homewise can offer a substantial reduction on the price of your next home and stress free ways to sell your existing property. -
REALISING RETIREMENT DREAMS OVERSEAS
New research from retirement housing and finance specialist Homewise reveals that around one in eleven retired people are considering living the dream of moving abroad. This equates to around 802,500 people.
The company believes that as the equity release market develops, more and more retired people will look to move overseas to find their ideal retirement property. Indeed, Homewise's research reveals that around 328,000 retired people would look to release over £30,000 of equity from their current retirement properties if they were to live abroad.
Mark Neal, Managing Director of Homewise said: "The development of the equity release market, which saw retired homeowners release £1.1 billion from their homes during 2005, will fuel the number of retired homeowners buying properties abroad. The retirement property market is booming."
"It is the stuff of retirement dreams to move overseas for better weather and a more relaxed way of life. Indeed, our research shows that 16% of people aged 65 and over would consider moving abroad if they could also retain a retirement property in the UK. The growing number and range of equity release products is making this easier to do and it will be a contributing factor behind the estimated 1.88 million Britons aged 55 and over who could be living abroad within four years."
The average value of British-owned property in Spain and France is around £109,500, although experts predict that prices are rising. A recent survey suggests that an elderly couple with a £500,000 house could raise as much as £220,000 through an equity release scheme - sufficient to purchase a retirement property abroad whilst retaining the right to live in their UK home for as long as they want.
Homewise warns retired people thinking about living abroad to consider all the implications. These include:
Financial
- Even if you pay with cash from equity released in the UK, consider taking out a small mortgage as this will mean that a survey is conducted on the property
Open a local bank account as most utility bills have to be paid by Direct Debit - Consider maintaining a property 'bolthole' in the UK
- Ensure that your state pension can be paid into a local bank account
Social
- Consider the implications for relationships with family and friends
Legal and insurance
- Ensure that a proper legal title exists on the property
- Take out adequate buildings and contents insurance cover
For Homewise's free Guide to Retirement Living, call FREEPHONE 0800 043 44 88 - Even if you pay with cash from equity released in the UK, consider taking out a small mortgage as this will mean that a survey is conducted on the property
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