The over 65s have seen their property wealth grow by nearly £17.5 billion in the past three months as house prices continue to climb earning the average pensioner more than £1,200 a month, new analysis from over-55s financial specialist Key Retirement shows.
Pensioners who own their homes outright have gained an average of £3,725 each from their houses in the past three months taking their property wealth to a new record high.
Retirees typically release £68,500 property wealth using equity release plans
In the five years since Key started monitoring the housing wealth of the over-65s, in January 2010, total pensioner property wealth has increased by 14% or £111 billion which equates to £23,700 on average for every homeowner.
Its Pensioner Property Index shows over-65 homeowners now own property wealth of £891.249 billion outright with pensioners across almost all of the UK benefiting.
The strong growth in property prices will help drive expansion of the equity release market further which enables homeowners to release wealth from their homes to help fund their later years, says Key. Its customers are typically releasing £68,500 property wealth.
Retired homeowners in London were the biggest winners gaining an average of around £14,238 each in the past three months, while homeowners in the South East of England are more than £8,290 better off and pensioners in East Anglia are £8,524 better off.
Key’s figures show a fifth of all pensioner property equity is owned by over-65s in London with total wealth of £178.894 billion. Nearly two-thirds of pensioner property wealth is concentrated in London, the South East, the South West and East Anglia.
Property & retirement planning
Dean Mirfin at Key Retirement, said: “The strength of the housing market is reflected in the growth in the amounts being released through equity release plans which are now an average £68,500 – an amount which dwarfs the average pension pot in the UK.
“The success of property investment for millions of over-65s homeowners highlights how homes are major assets which should be considered as part of anyone’s retirement planning.
“Property prices rise and fall but over-65 homeowners control more than £891 billion in assets which can make a major contribution to enhancing retirement lifestyles. Pensioners however need specialist advice before accessing their property wealth.”