With new research by Key Retirement suggesting that pensioner property wealth has rocketed by more than £7,000 per person over the last six months alone, the need for careful financial planning has never been so acute for retirees.
Following years of austerity, and a pronounced housing slump, the welcome news for retired homeowners is that pensioner property wealth has grown by a very healthy £7,100 per person over the last six months, according to the Key Retirement findings. That’s a collective gain of £33bn, thanks to the housing industry’s rampant growth.
Property wealth hits all-time high
“Retired homeowners have huge assets in their houses with total property wealth hitting an all-time high of £861bn,” Dean Mirfin, group director at Key Retirement, told Mortgage Introducer. “In the past five years they’ve made an average of more than £17,000 each from their homes, which is an impressive return with interest rates at historic lows.
“Even if or when the property market cools they will still have a major asset. With equity release rates at their lowest in 10 years and the long-term trend for rates continuing to go down, we expect the market to continue to expand,” he added.
Perhaps unsurprisingly, retired London homeowners enjoyed the biggest gains, amassing more than £20,000 in property wealth over the last six months. The next best accruals were made by homeowners in the South East (£14,000) and East Anglia (£13,000). While the only retirees to experience a dip in housing wealth were in the North East, where average losses of £581 were recorded.
A grand total of £1.38bn worth of Equity release was taken out by over-65s last year, amounting to an average of £64,800 per household.
Where to seek out retirement advice
With all this newfound wealth to top up years of careful pension planning and personal savings available to pensioners, the need to access appropriate advice has never been more pronounced. Thankfully, there is plenty of help at hand, as the following examples illustrate.
Pension Wise: As we’ve mentioned before, the government’s independent service offers free and impartial information for those nearing retirement. The official website can be accessed at pensionwise.gov.uk or, if you’d prefer to speak with someone, call the Pensions Advisory Service on 0300 123 1047.
Citizens Advice: You can access free advice, about Pension Wise and other retirement matters in general, at more than 500 locations nationwide. Locate your local office at citizensadvice.org.uk or call the advice line on 03454 040506.
Independent Financial Advice: Seeking the guidance of an IFA, like Acumen, is undoubtedly the most effective means of gaining some clarity and reassurance for the future. You can visit www.acumenfinancial.co.uk to find out more about our services or call 0151 520 4353.
Acumen’s account on matters
Acumen Managing Director and pensions specialist, Angela Maher, said: “With retired homeowners enjoying unprecedented returns of equity on their house prices of late, and the new relaxed pension rules coming into effect, there has never been a more critical time for retirees to plan for their financial futures.
“Thankfully, there is a wealth of independent and Government advice sources for them to turn to for useful advice. We appreciate, however, that wading through the various sources of information and trying to reach your own financial planning conclusions can be daunting.
That is why we would always advocate talking to Independent Financial Advisers, like Acumen, to glean a clear and impartial overview of all the options available to you. Why leave something as precious as your hard-earned retirement pot to chance?