More than 3.7 million homeowners aged 55 to 79 in the UK do not have enough income to achieve a moderate standard of living in retirement, despite owning substantial housing wealth, according to a report by research agency Fairer Finance. This represents nearly half (46%) of homeowners in that age group.
Housing wealth fails to bridge income gap
Of those affected, around 1.8 million own between £200,000 and £400,000 in housing equity, while 650,000 own property worth more than £400,000. The report highlights that many pensioners are living in expensive, unsuitable homes and face barriers to downsizing due to a lack of accessible retirement housing and high service charges.
Dennis Reed, of Silver Voices, a membership organisation for the over-60s, said: “Many of our members live in relative poverty in family homes which are expensive to run, but the only options available to them are often apartments in retirement complexes which have exorbitant service charges and are then difficult to sell on. We have long argued for stamp duty to be abolished for last-time buyers.”
State pension insufficient for dignified living
Reed added: “The state pension is way below the level required for a dignified standard of living. So millions of pensioners on modest private pensions also struggle to heat their homes and keep to a healthy diet.” The report underscores that property wealth alone cannot solve retirement income shortfalls.
Mike Ambery, of pensions firm Standard Life, said: “For many people today, a growing share of their wealth is tied up in their home rather than in a pension. Property can certainly play a useful supporting role in retirement planning, but it isn’t a complete solution on its own, and leaning on it too heavily can leave people a bit exposed.”
Single women most at risk
Tim Hogg, of Fairer Finance, said: “Our research shows that huge numbers of people heading for a retirement income shortfall are sitting on significant housing wealth which could bridge the gap – if they want it to. The picture is particularly stark for single women, who face the highest risk of low living standards in retirement, despite often owning homes worth hundreds of thousands of pounds.”
Caroline Abrahams, of charity Age UK, said: “The Pensions Commission, set up by the Government, has also found that millions are set to miss what experts say is the minimum retirement living standard. At best, it means not being able to afford the extras that bring joy to you, like being able to pay for holidays and nice meals out, and at worst it can leave you scrimping to get by.”
