Staying put in retirement

As we approach retirement, more and more of us are coming to realise just how much of our wealth is invested in in our homes. Aviva’s latest Real Retirement Report finds that 69% of over-45 homeowners believe their property is worth more than their pensions, savings and investments combined.

And 46% see their homes as a key part of retirement planning. It’s not really surprising – with the demands which many of us face as time goes by, it seems hard to ignore what may well be our biggest asset. The report finds that almost one in three (31%) have given, or plan to give, money to help a child become a first time buyer. And 56% expect housing wealth will be needed to pay for care in later life.

So, are the nation’s retirees embracing the idea of downsizing their homes to meet their future needs? Maybe this is something you’re considering yourself, whether you’re approaching retirement or have already finished working. Aviva’s report suggests downsizing isn’t as popular an option as we might imagine. After all, for many of us, it’s not just equity which is invested in our homes. It’s emotion, too.

No matter what they say, a home isn’t just bricks and mortar

Many of us inevitably develop a strong attachment to our homes. We all remember buying that first ‘place of our own’. But since then, the average over-45 homeowner has owned just two subsequent properties and has lived in their current home for 21 years. Plenty of time to get attached... especially for those of us who are now approaching retirement.

Asked about their plans for the future, four in five of the people we surveyed said they wanted to remain living in their homes for as long as they were physically able to. In comparison, only 26% had either downsized already or planned to do so. 

So why are so many people so keen on the idea of staying put? The answers are quite simple. 31% said that this was just a matter of being happy or content with their home or garden (31%). And 12% felt that they live in a convenient and safe neighbourhood – something which they wouldn’t want to compromise on.

The report found that people nearing retirement tend to back up their commitment to their home with actions as well as words. 80% of homeowners in the 55 to 64 age group have carried out renovations to their home in the last 5 years. Maybe your own experience bears this out.

So, downsizing might not be as attractive an option as it might seem to be on purely financial grounds. Alistair McQueen, Aviva Savings and Retirement Manager, puts it like this:

“As a nation of homeowners, there is a remarkable attachment between many of us and the houses we live in. Our findings suggest that, more often than not, the lifestyle we aspire to in retirement involves remaining in the homes we have consistently nurtured and come to cherish over the years”

It’s not just about downsizing… 

Aviva can help you to understand the options you have as you approach or enter retirement, including the possibility of using your home to fund your lifestyle without moving out of it. Visit the Retirement section of our website to find out more. 

AR01741  08/2016

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