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Property wealth beats pension savings for over-55s

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Property wealth is worth more than the total pension savings for nearly six out of 10 over-55s highlighting the increased importance of making the best use of house price growth in retirement planning, according to new research Bower Private Clients.

Its study found 58 per cent of over-55s estimate their mortgage-free home is worth more than the combined value of their and their partner’s pension savings underlining the need for access to property wealth.
 
Around 11 per cent of those questioned say they would prefer to use the wealth tied up in their home to help fund retirement before turning their pension fund into an income and that 25 per cent would welcome the opportunity to be able to borrow against the value of their property.
 
Over-55s in Scotland and the South East of England are the most likely to have homes worth more than their pension funds – 63 per cent of those questioned in Scotland and 62 per cent in the South East say their properties are worth more than their retirement savings. But that drops to 45 per cent in Wales.
 
The research supports analysis from Bower Private Clients showing more than 7,200 GBP1 million-plus homes are being bought a year without mortgages with two-thirds being sold in London.
 
Andrea Rozario, Chief Corporate Officer at Bower Private Clients, says: “The benefits of property investment are highlighted by the fact that the majority of over-55s have more wealth in their homes than their pension savings.
 
“Stock market volatility and historically low interest rates have had a major impact on pension and investment income since the financial crash while those who are lucky enough to have got on the property ladder have benefited.
 
“That means over-55s may find themselves in a position where they have the home which they love but not the income or liquid assets they need to fund their own retirement while being able to help family. Lifetime mortgages are among the solutions they should be looking at.”
 
Bower Private Clients believes growing property wealth underlines the need for independent specialist advice and bespoke solutions for retired homeowners looking to maximise property assets.
 
It has recruited specialist advisers from private banks and has access to specialist underwriters to help it deliver personalised equity release solutions for customers with an initial focus on London and the South East.
 
It is working with private banks, accountants and law firms and offers bespoke solutions for high net worth clients as more expensive properties, either freeholds or leaseholds often need specialist attention. Its advisers are able to provide a personalised service with equity release solutions tailored for individual customers.

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