Pensioner Property Wealth Nears £920 Billion
26 February 2016
Over-65 homeowners are £3,100 better off on average over three months, Key Retirement Pensioner Property Index shows
Retired homeowners have seen their property wealth grow by nearly £13.7 billion in the past three months as house prices continue to climb earning the average pensioner more than £1,000 a month, new analysis* from leading over-55s financial specialist Key Retirement shows.
Pensioners who own their homes outright have earned an average of £3,106 tax-free each from their houses in the past three months taking their property wealth to a new record high.
In the six years since Key started monitoring the housing wealth of the over-65s, in January 2010, total pensioner property wealth has increased by around 20% or £152 billion which is worth around £37,160 on average for every homeowner.
Its Pensioner Property Index shows over-65 homeowners now own property wealth of £917.1 billion outright with pensioners across almost all of the country benefiting in the past three months.
The continuing strong growth in house prices is highlighting the importance of property wealth for retirement planning, Key believes. That is underlined by growth in the equity release market with customers releasing property wealth taking around £72,000 on average.
Retired homeowners in London were the biggest winners gaining an average of around £15,061 each in the past three months, while homeowners in the South East of England are more than £4,537 better off and pensioners in East Anglia are £6,448 better off.
Dean Mirfin, technical director at Key (www.keyadvice.co.uk), said: “Retired homeowners have huge assets in their homes which can make a massive contribution to their standard of living demonstrating how important property investment is.
“For many the major barometer of their financial well-being is the value of their home. The increase in values experienced since our research began in 2010 show the impact that property values can have on pensioner capital and income in retirement.
“The cash that can be generated from property easily outstrips the average amount held in private pensions highlighting how important it is for homeowners to seek independent expert advice on how to use their housing wealth.”
The table below shows the 11 areas of Great Britain monitored by Key’s index with nine recording gains and only Scotland and the East Midlands seeing price falls.
|Average change in value of home equity for homeowners aged 65+ (between October and January index)||Combined change in value of home equity for homeowners aged 65+ (between October and January index)|
|London||increase of £15,061||+£9.2 billion|
|South East||increase of £4,537||+£5.9 billion|
|South West||increase of £1,509||+£3.2 billion|
|North West||increase of £760||+£1.4 billion|
|East Anglia||increase of £6,448||+£4.2 billion|
|East Midlands||£733 decrease||-£316.2 million|
|West Midlands||increase of £1,487||+£1.15 billion|
|Scotland||£1,663 decrease||-£468.966 million|
|Yorks/Humbs||increase of £2,436||+£527.8 million|
|Wales||increase of £718||+£446.9 million|
|North East||increase of £258||+£70.813 million|
|GREAT BRITAIN||+£3,106||£13.699 billion|
The table below shows over-65 homeowners in the North West are most likely to own their home outright – Key’s analysis shows 671,000 own their homes without mortgages compared with 656,000 in the South East.
|Estimated property equity in homes owned outright by people aged 65+ (January 2016)||Estimated percentage of total value of property equity belonging to people aged 65+ (January 2016)||Number of households in the region owned outright by people aged 65+|
|South East||£171,597 billion||18.71%||656,000|
|South West||£122,898 billion||13.4%||626,600|
|East Anglia||£103,291 billion||11.26%||472,000|
|North West||£77,938 billion||8.5%||671,000|
|East Midlands||£59,148 billion||6.45%||431,200|
|West Midlands||£51,155 billion||5.58%||358,400|
|North East||£27,244 billion||2.97%||275,000|
|GREAT BRITAIN||£917,171 billion||4,409,400|
Anyone looking to release equity from their home can get Key’s independent guide to equity release by calling 0800 531 6010 or visiting www.keyadvice.co.uk/equity-release/request-a-free-guide
Notes to Editors
* Key Retirement’s Pensioner Property Index tracks the amount of equity held in property by people over 65 years old in Great Britain. Figures are based on analysis of data from the ONS Family Spending Report (2014), the Land Registry House Price Index, Registers of Scotland House Price Statistics and ICM (2014) and Key Retirement’s UK Equity Release Market Monitor.