Homes to prop up retirement savings
A significant number of people are planning to use the value of their homes to support their retirement income, new research has suggested.
A survey of 4,000 homeowners, carried out for insurers LV, found that 12 per cent of those aged 50 or over have been putting less into their pension funds in the expectation that property prices are set to increase.
This reliance on the value of properties to supplement retirement savings comes despite the fact that, on average, some £27,000 has been lost on house prices in the last two years of the economic downturn.
Optimism about a recovery in the housing market, however, has prompted almost a third of over-50s to anticipate house prices rising to their pre-recession levels within the next five years.
Of those polled, some 17 per cent said they had plans to boost the value of their homes by carrying out improvements, while 29 per cent said that they were simply banking on a recovery in values.
Some experts, though, have warned against a dependence on releasing equity from properties as a way of ensuring retirement income. Unlocking equity can be expensive and inflexible, consumer organisation Which? has argued.