Downsizing your property may not be the answer to retirement prosperity
New research has revealed that 45% of over 50s believe that downsizing their property will be the answer to a prosperous retirement. This though, according to Saga Personal Finance could be a mistaken belief. The reality may be that this option is only available to people living in detached houses, or certain property hotspots such as London or areas in the South.
The idea of using property as a retirement funding option has been steadily increasing over the past few years. People who choose to do this through using equity release are taking on average £46,000 from their property. For those wishing to release a similar amount of cash through downsizing their property a figure of closer to £56,000 would need to be released once moving costs are taken into account. Around two thirds of homeowners will not be in a position to realise this amount of money by moving house.
The figures suggest that unless you are willing to move from your current region to another where the cost of living is considerably cheaper, £50,000 will not be an obtainable figure through downsizing. The exception to this rule is people living in London and the South East where it is possible to obtain £50,000 by moving from a semi detached house to a flat.
Ali Crossley, chief operating officer, Saga Personal Finance, commented: “You often hear people saying that downsizing their home is their pension but for many, unless they plan to live in a tent, the answer is, no it isn’t. The good news is that there are other options out there that enable you to remain in the home you love, close to friends and family, without the hassle and expense of moving.”
Equity release enables a homeowner to release some of the cash tied up in the equity of their home without having to move. The cash can be released as a lump sum, or through a draw down facility, which allows the customer to withdraw the money as and when it is needed. This saves the customer paying interest on the loan before it’s required.
If you feel that equity release may be right for you, or if you’d just like to know more you can call 0800 622 6724 or request a call back. One of our team will be able to discuss with you your circumstances, review your eligibility and, if appropriate, arrange an appointment for you with an adviser.