Those aged 60 or older have a collective £841 billion tied up in their properties, equity which, if released, could considerably ease the burden on pensions, according to findings from Norwich Union.
Two-thirds of the population over the age of 60 receive less than £10,000 a year, while they each harbour an average of £82,446 in the value of their homes.
Those in the South East are in the best position to reap the benefits, with a higher average house price that gives them a total of £173 billion with which to improve their lifestyles. The over 60s in the North East, on the other hand, are at the lowest advantage, as their equity pot comes to just £30 billion in comparison.
Despite the considerable financial hardship faced by many people over the age of 60 and the potential windfall assets available to them literally on their doorsteps, just ten per cent know the value of their property, and an even lower six per cent would consider selling it in order to release its equity.
Of those that are aware of their property’s value, 13 per cent are between the age of 60 and 69, while just six per cent of homeowners older than 80 know how much their property is worth.
The fact that so few know the value of their home comes as little surprise, as more than half of those over 60 admitted they had never had a valuation done, and 30 per cent said at least 10 years had passed since they last had it valued.
Considering how rapidly house prices have sky-rocketed in recent years – increasing by 213 per cent in the last decade – there is bound to be a vast disparity between the perceived value and the actual value of such people’s homes.
While selling their property to release equity and perhaps make life easier during retirement years, 68 per cent would not consider selling their home because they are too attached to it, and are concerned about not being able to pass it on to their offspring.
Of the remaining 32 per cent who said they would consider equity release as a viable option, 26 per cent would only do so in the event of life-changing circumstances, such as the death of a partner, decreased mobility or if long-term care became necessary. Just six per cent cited cash release as their sole motivation for considering it.
Dominic Fraser-Smith, group product manager at Norwich Union Post Retirement Products, commented: “It is upsetting to see that two thirds of over-60s are just getting by on £10,000 or less per year while sitting in what is potentially a retirement goldmine that could dramatically improve their quality of life.
“Equity release offers consumers the opportunity to access the financial value of their property without incurring moving costs or leaving the home they love, so it can be a handy solution to a difficult problem.”
Learn more about Equity Release