House price falls hit those relying on property for retirement income

A fall in house prices has hit over 50s relying on their property to provide a pension income.

House prices fell marginally once again in August according to the Land Registry’s House Price Index, down a further 2.6 per cent, bringing the average house price in England and Wales to £162,347.

But the overall reduction in property values has wiped an average of £24,651 off the value of the homes of those nearing retirement in the last three years. A total of £56 billion according to retirement specialists LV=.

A third of over 50s look set to use the equity in their home to supplement their income in retirement according to LV=, as volatile stock markets have reduced the value of pension funds, and millions prepare to delay their retirement for financial reasons.

The research also found that just one fifth of over 50s feel that they are financially on track for retirement. Many are waiting for property prices to go back up again, while others are seeking alternative retirement options.

Commenting, Vanessa Owen, head of equity release at LV= said: “The UK economy is still facing an uncertain future, with rising inflation, low interest rates and volatility in global stock markets, so it is understandable that those approaching retirement are feeling vulnerable.”

The news comes as research from Prudential reveals that more than a third of pension scheme members have put their contributions on hold.