Brits approaching retirement are being warned that downsizing their property may not boost their pension income as much as they might think.
According to research from Standard Life, Brits can no longer rely on their property to help fund their retirement following a fall in property prices, combined with a reduction in annuity rates.
On average, downsizing a home in the UK in 2008 would have provided more than £53 in retirement income, however this figure has now fallen to just over £43 a week.
For those moving from a detached house worth around £290,000 to a bungalow worth an estimated £192,000 they can expect to boost their pension pot by £71 a week – a significant decrease since 2008 when they could have earned £100.
Meanwhile, the picture appears even bleaker for those living in a semi-detached house wanting to move a flat as this would only provide an additional £4 a week in income.
Commenting, Andrew Tully, senior pensions policy manager at Standard Life suggests that many people are still "pinning their hopes" on using their home to generate their retirement income, and are avoiding more traditional methods of investing in a pension fund or savings account.
"Many people need a reality check to get their long-term financial planning back on track. People pinning their retirement dreams on downsizing their property will be in for a shock," he said.
Urging people not to rely solely on their property funding their later years, Mr Tully added: "Banking on downsizing to generate sufficient income is a potential retirement disaster unless you have also made provision elsewhere. The old adage of not putting all your eggs in one basket has never been more appropriate."
© Fair Investment Company Ltd