Pensioner property wealth hits £861 billion

25 March 2015

Average over-65 homeowner makes nearly £1,200 a month from their property, Key Retirement Pensioner Property Index shows

Retired homeowners have seen their property wealth grow by more than £33 billion in the past six months with the housing boom earning the average pensioner nearly £1,200 a month, new analysis* from leading over-55s financial specialist Key Retirement shows.

Pensioners who own their homes outright have earned an average of £7,117 each from their homes in the past six months taking their property wealth to a new record high.

In the five years since Key started monitoring the housing wealth of the over-65s, in January 2010, total pensioner property wealth has increased by £81.27 billion - the equivalent of £17,323 each.

Its Pensioner Property Equity Index shows over-65 homeowners now own property wealth of £861.188 billion outright as house prices across almost all of the UK rose.

The growth in property prices is helping to drive the equity release market which enables homeowners to release wealth from their homes - Key's figures show a record high of £1.38 billion was released last year with the average customer taking around £64,800 from their home.

Retired homeowners in London were the biggest winners gaining an average of more than £20,675 each in the past six months, while homeowners in the South East are more than £14,123 better off and pensioners in East Anglia are £13,105 better off.

Only retired homeowners in the North East saw a fall in housing wealth with average losses of £581 in the six months.

Key's figures show nearly a fifth of all pensioner property equity is owned by over-65s in London with total wealth of £167.731 billion. Nearly two-thirds of pensioner property wealth is concentrated in London, the South East, the South West and East Anglia.

Dean Mirfin, group director at Key (www.keyadvice.co.uk), said: "Retired homeowners have huge assets in their houses with total property wealth hitting an all-time high of £861 billion.

"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 ten years and the long term trend for rates continuing to go down, we expect the market to continue to expand.

"That's why retired homeowners, and those approaching retirement, should think carefully about making use of their property wealth in retirement planning. New pension rules coming into effect next month make a holistic approach to retirement planning even more important and the need for independent advice crucial."

The table below shows the 11 areas of Great Britain monitored by Key's index with 10 recording gains.