Wealth of mature homeowners set to double in next 10 years

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Wealth of mature homeowners set to double in next 10 years

The total property wealth of those aged 55 and older will double to almost £2.5trn by 2035, Simon Chalk of Age Partnership has warned.

Figures from Age Partnership suggested the UK was witnessing a radical long-term shift towards people reaching retirement age with a substantial nest in the form of property wealth.

Mr Chalk, equity release manager at Age Partnership, said: “In 20 years, people at or near retirement could be able to tap into a combined extra £1.3trn of property wealth to help fund their retirement.”

The findings highlight a major long-term shift towards the importance of housing wealth in retirement financial planning, and could play a major part in funding retirement.

According to the retirement income firm, over-55s are sitting on £1.2trn worth of property wealth. In the next 20 years, this is forecast to rise by 105 per cent to £2.5trn, if property prices in the UK rise by a modest annual average of 2 per cent.

Even if house prices remain flat, the housing wealth could increase by 38 per cent, to £1.7tn, by 2035.

With inflation hovering at approximately zero, any increase in housing wealth means a real terms increase in spending power, Mr Chalk said.

Over-55 population in England is expected to rise by 33.8 per cent to 21.3m by 2035. One of the main drivers for the growth, according to Age Partnership, was that the large post-war baby boomer generation, which is currently at or nearing retirement, is expected to live longer.

Mr Chalk highlighted two options open to those not wanting to tap into housing wealth to help fund their retirement: downsizing or equity release.

 Forecast growth in the property wealth of over 55s 2015-2035





If house prices do not change (0% HPI)




% growth since 2015


↑ 21%

↑ 38%

If house prices grow by 2% each year




% growth since 2015


↑ 48%

↑ 105%

Age Partnership

On 2 November, analysis from financial provider Key Retirement revealed that pensioners were boosting their retirement income by an average £74,787 by cashing in on rising property prices.

Adviser view

Blair Cann, financial planner at Hertfordshire-based M Thurlow & Co Insurance Brokers, said: “Housing wealth will play a bigger part in funding retirement. This is also because house prices are set to increase by 20 per cent over the next five years, according to Savills estate agency.

“As an IFA, fully qualified to advise on equity release, I would suggest equity release as a last choice and that downsizing is the preferred option. Most advisers would do this.”