Pensioners forced to sell homes to fund retirement

Over a quarter of struggling British homeowners aged over 65 plan to sell their properties to raise extra income, research from Prudential shows.

Wealth gained from property sales can be a substantial source of income for retirees. These findings indicate that nearly 2.5 million people would stand to make around £62,000 each by downsizing or moving into rented accommodation.

What the experts are saying

Whilst one in four respondents say the move will help bolster their retirement income, around one in ten aimed to pay off debts, while a smaller fraction needed help with living costs.

This is prompting concern from pension and retirement experts, who point to the lack of security in presuming a property will be able to ‘paper over’ flaws in their retirement plans. They are directing attention to the constant fluctuations of the property market as the source for their concern.

The developments have led the Financial Conduct Authority – a quasi-governmental agency which upholds the UK’s financial markets – to issue a ‘wake-up call’ to borrowers. The FCA has stated borrowers need to connect with lenders to work out how to live comfortably in retirement.

The current climate

By 2020, the state pension ages for men and women will be pegged at 66, a figure that is expected to steadily rise in line with life expectancy.

Currently around one in ten people aged 65 or over are employed – the largest amount since records began.

Unless people start sensible savings plans as early as they can, and to ensure talk over their options in retirement with an independent financial adviser, there are fears this “grey army” will not be able to secure the retirement lifestyle they desire.