Millions of us will only be able to retire if we cash in on our properties

Telegraph

24-05-2025

Britain is edging towards a later life funding crisis.
With fewer people reaching retirement with gold-plated 'final salary' pension schemes, increasing numbers are going to be hitting later life without enough savings to maintain our desired standard of living.
The good news is that many of us are sitting on, and even sleeping in, a considerable store of wealth – our homes. The bad news is that accessing the wealth in our properties is not nearly as easy as it should be.
Once your children have flown the nest, it makes sense to think about moving to a smaller property – leaving you with a cash windfall to spend on your retirement. But while many people would be keen to access their housing wealth that way – in practice, their options are often limited.
If you've spent your life raising a family in a community with friends and other family, you probably want to stay there in retirement. Chances are, however, that wherever you live there is a sparsity of suitable property.
For a start, there simply aren't enough retirement properties – in any part of the country. And where there are retirement homes, they often come with unreasonable service charges and collapse in value when they come to be sold.
While governments of all stripes talk about the need to build more houses, you rarely hear politicians talking about the need to build more retirement homes. But we need them desperately. And we need proper regulation to help protect the value of these properties, and to control service charges.
For those who don't want to move – or can't – there is also the option of later life lending, such as equity release.
But this is a sector that is still shaking off a bad reputation from its early days 30 years ago, and many are wary about using it.
In reality, equity release will be right for many retirees. But as things stand, there's a stigma about using these products, and they are rarely talked about as a mainstream option.
Last week, my organisation Fairer Finance published a report showing that by 2040, more than half of retirees will need to use their property to maintain their standard of living in later life.
But if we're going to make that possible, we need the Government and regulators to act now.
Government advice and guidance services, like Pension Wise and MoneyHelper, need to start talking about housing wealth as a key plank of retirement planning. We also need technology to play a role – helping people see all their retirement assets, from pensions to savings to property, all in one place.
I'd like to see public information campaigns that start to talk about housing as a key store of wealth that we should be using to help fund retirement. The Government should also look for other ways to incentivise downsizing, such as reducing or even scrapping stamp duty for 'last-time' buyers.
The City watchdog also needs to make sure that its rules for different types of financial advisers and brokers support this wider conversation.
Many more people are now carrying residential mortgages through into their 50s, 60s and 70s. When people come to remortgage it can be a great opportunity to engage them about the role their property wealth might play in helping fund their retirement.
This should be a no-brainer for politicians and regulators. Our analysis shows that it could unlock over £20bn of additional consumer spending every year – a welcome boost for our economy. And more importantly, it will support all of us to live happier lives in retirement.
As things stand, it's still difficult to make the most of your housing wealth. But there are increasingly good lending products and a growing number of retirement communities to downsize into.