Just 4 per cent of people would consider equity release in retirement, despite recognising the "huge untapped potential" in their current home, research by Retirement Advantage has revealed.
The research found the vast majority - 82 per cent - of the 1,001 homeowners surveyed intended to "grow old" in their current home.
Sixty-three per cent of the respondents - all of whom also had pensions in place - said their home was worth more than their pension.
However, only 4 per cent said they would consider releasing equity in their home while remaining in it.
Just over a quarter, meanwhile, said they would consider downsizing to a cheaper property.
The report, entitled "Home Truths", argued without "tapping into property wealth", the majority of people would not be able to "fulfil their retirement aspirations".
It pointed out property wealth in the UK stood at £6.17 trillion, with the total value available to those aged 55 plus in England, Scotland and Wales through equity release valued at £365bn.
That compared to £75bn held in the defined contribution pension pots of those aged 55 plus.
The old world view that our retirement income will be based primarily on our pension, simply won’t deliver for most people anymore.Andrew TullyAndrew Tully, pensions technical director at Retirement Advantage, said emotional attachment to property was preventing retirees from accessing this capital.
He urged advisers to address these "behavioural biases".
"The old world view that our retirement income will be based primarily on our pension, simply won’t deliver for most people anymore.
"Lower pension provision and wider demographic trends mean that advisers and their clients should consider how wealth tied up in assets such as property can be part of the solution," he said.
He said the research had uncovered "a series of deep-seeded emotional attachments to property, and shortcuts in financial decision-making, that advisers must understand if they are to help clients consider all of their options".
"The home truths we have set out are a blueprint for advisers to have dispassionate, rational, and ultimately more effective conversations with clients to help them achieve better outcomes in retirement," he said.
The research comes as the equity release industry braces itself for a potential surge in demand for equity release products, as the first wave of interest-only mortgages reach maturity this year.
Figures released last week by the Equity Release Council revealed the total value of property wealth accessed through equity release rose by 26 per cent in 2016, hitting a record high of £2.1bn.
james.fernyhough@ft.com
