This is according to a survey by Legal & General Home Finance which discovered 22% of those looking ahead to retirement will unlock property wealth to provide an income when they finish work.
According to the survey of 4,000 future retirees, a third of people who aren’t currently retired own a property but have less than £10,000 saved in their pension pot.
A further 22% of people hold no pensions savings at all.
And Legal & General said, the significant number of small or empty pots, coupled with soaring house price rises in England and Wales mean many will have to turn to their property to pay for retirement.
Options for releasing property wealth may include later life lending, such as equity release, or downsizing.
Claire Singleton, CEO, of Legal & General Home Finance, said: “The significant increase in house prices in recent years has likely shifted many people’s expectations of the role property wealth will eventually play in supporting their retirement.
“We anticipate that using your home to fund your retirement will become more commonplace in the future, whether that’s by downsizing to free up funds or releasing money tied up in your home through products like lifetime mortgages.”
According to Legal & General the average homeowner could access over £72,988 in equity release, on current house prices in England and Wales.
In the survey 10% of respondents said they expected to downsize, 9% were planning to sell their property and 6% would be accessing the equity using a lifetime mortgage.
Claire added: “It’s never too early to start thinking about how you plan to fund retirement, and to seek the appropriate advice to get your affairs in order, and for many homeowners their property could be the key to getting the lifestyle they desire.
“Our findings also show there are a large number of people currently in retirement who may be on a limited income and could benefit from the likely increases in the value of their home.
“It’s important we challenge the discomfort some people still have with using cash from their home to help them achieve better financial outcomes in retirement.”
