The report, Visions of Britain 2020, published by Friends Provident in conjunction with Future Foundation shows that the desire to stay in one's own home is continuing to increase, as people get older while the intention to down-size declines. Among people aged 34-44, 42% want to stay in their own house when they retire. For people aged 65+ the proportion soars to 77%.
Trevor Matthews, CEO Friends Provident Holdings said:
"There is no doubt people still see their house as an investment, however, it is important to make the distinction between people appreciating the value of their house and actually planning to use it as an asset. Our research has revealed that currently only 11% of those we spoke to plan on selling or downsizing their property to fund retirement and an even smaller proportion - 6% plan on releasing the equity in their property.
"However, with increased longevity and the decline of final salary schemes, it is clear that in the future many people will need to consider how they can realise some of the value from their house; as a result we believe that equity release schemes will become significantly more commonplace in the future."
The report reveals that Britons still see their homes as an investment, however, there is a vast difference between respondents that were actually appreciating the worth of their house and actually planning to use it as a way of funding their retirement. In the fourth chapter of the Visions of Britain 2020 series, Ageing and Retirement, it was uncovered that only 6% of UK citizens plan on releasing the equity in their property to fund their retirement.
It is worrying that there are so many British adults that do not have a pension, however, an equity release scheme is one solution to improving the circumstances of those planning to retire in 2020 and beyond.
With a majority of Britons (55%) planning on staying in their current property when they retire, equity release schemes may have to be rehabilitated in the public consciousness to help people realise the value of what is often their most substantial asset.
Furthermore, the Pensions Policy Institute estimates that the value of housing wealth owned by people over the State Pensions Age could increase by 40.5% from £907 billion in 2009 to £1,274 billion in 2030 (in 2009 earnings terms). The implication here is that the number of pensioner households with medium or high value houses who could release their housing wealth in order to support their retirement could increase by a third from 3.9 million households in 2009 to 5.2 million in 2030 (PPI).
