As someone who downsized nearly five years ago I was interested to read that nearly three quarters of the UK’s 10.4 million pensioners own their own home and a quarter of these expects to sell their property to raise money or simply to make their life easier, according to new research.
Well I certainly agree that it has made life easier for my wife and I as we can now both walk to work and now make full use of all our space without the worry of having to cut the lawn each week!
So back to the research which found that four in every five (81 per cent) retired homeowners who expect to sell are planning to buy another property. This is equivalent to around one million homes being bought and sold by pensioners, many of whom will release substantial amounts of cash by downsizing.
The majority (73 per cent) of retirees who plan to sell up and buy another property want to move into a smaller and less expensive home. On average, they expect downsizing to raise as much as £62,000.
Boosting income in retirement
Nearly a quarter (23 per cent) plan to use the money raised to boost their income in retirement, 13 per cent will pay off debts and eight per cent say they’ll use the money to help with everyday living costs.
The research also shows that over one in five (22 per cent) retired homeowners still have an outstanding mortgage, with average monthly payments of £254.
A simpler life
The convenience of running a smaller home was the most commonly stated motivation for those who plan to downsize – 48 per cent say they want a simpler life. Separately, 22 per cent claim raising money is the main driver for their sale, while 11 per cent want to reduce household bills.
Staying on the property ladder remains the overwhelming preference among retired homeowners. Just six per cent of pensioners planning to sell their home intend to move into specialist retirement accommodation, while only four per cent expect to move into a rental property.
Making the decision to downsize is not always straight forward as you have overcome the emotional attachment of “selling the family home”. However, once that has been overcome you then have to contend with taking all the accumulated and no longer used collection of “memorabilia” stored in the attic to car boot sales, charity shops and finally the tip!
Having done all that and finally moved, what do you do with the spare cash to ensure you have extra income to enjoy your retirement?
With all these financial decisions it pays to take professional advice and our financial advisers will be pleased to discuss on 01582 715777.
Lyndhurst Financial Management Limited.
Authorised and Regulated by the Financial Conduct Authority.