An estimated 1.2 million over 50s view their home as a pension fund, planning to use the equity they have built up to finance their retirement.
New research from equity release providers LV= has found that homeowners nearing retirement are of the opinion that 'home is pension', which could help to fill the gap left by falling interest rates which have eaten into savings and investments.
Nearly half of over 50s who are still in work still have a mortgage to pay, and a fifth say that a rise in interest rates would further hinder their ability to save for their retirement.
The number of working over 50s who believe they will have to delay their retirement for financial reasons has increased to 41 per cent from 28 per cent last year, with 19 per cent delaying it due to the fall in house prices.
More than half of over 50s believe an average £21,706 has been wiped off the value of their homes since the financial crisis struck three years ago, while their pension savings have simultaneously fallen in value.
Of those who are still in work, 54 per cent said they would advise their children to invest in property as part of their retirement planning, whereas 53 per cent would advise them to pay into a pension.
But despite the falls in property prices, the over 50s are still sitting on a property gold mine and many have not been put off; 23 per cent are considering using some or all of the equity in their home.
Nearly a quarter of those planning to use their property to fund their retirement believe it is their best option after the value of their pension savings and investments has fallen and will no longer provide the income they expected.
Some are going to wait until property prices go back up, and others will make home improvements to increase the value of their homes, before half intend to unlock the value in the homes by downsizing, while 12 per cent plan to use an equity release product.
Commenting, Vanessa Owen, head of LV= equity release, said: "It seems to be increasingly commonplace for those approaching retirement to consider using the equity in their property as part of their overall retirement plan."
Ms Owen concluded that, "For many, their home is still a big part of their wealth and trading down to a smaller home or using a suitable equity release product may be the only option for them."
© Fair Investment Company Ltd
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