How to Downsize Your Home for Retirement: Step-by-Step Guide

Downsizing for retirement is one option many people consider as they plan for later life. It can help make day-to-day living simpler and may support your finances in a few different ways, such as:

• Reducing expenses - A smaller home often means lower maintenance, insurance, and utility costs.

• Freeing up equity - Moving to a less expensive property could release money to support your retirement plans or to help family.

• Simplifying life - A smaller house is often easier to maintain, as it requires less physical labour.

• A change of scenery - Downsizing gives some people the chance to move somewhere new, whether that’s closer to family, the coast or the countryside.

This guide explains the main things to think about before downsizing. It aims to give clear, helpful information so you can decide if this option feels right for you.
 

When to Consider Downsizing

There are times in life when downsizing starts to feel like the right option. The signs are often small at first, but they can help you see whether a move might support your goals.

For example, your lifestyle may change in retirement. You might want extra cash for things you haven’t had time to enjoy before. You might also want a smaller house now your children have moved out, and you don’t need the space anymore.

Everyone has their personal reasons for downsizing for retirement. What matters most is being clear on why you want to downsize. This can make the decision easier and help you choose a home that suits your needs in the long run.
 

Step 1: Assess Your Needs and Priorities

The first step to downsizing is figuring out what is most important to you in retirement, for example, you need to consider factors such as:

• Proximity to family members - You want to move closer to your loved ones.

• Accessibility - Your current house may no longer suit your mobility needs. Downsizing could make it easier to get around the house.

• Lifestyle change - You want to try out a new way of life, living by the sea, in a rural town or in a city.

• Lower housing related costs - You’d like to reduce your maintenance cost as much as possible.

When considering these types of factors, you could try and organise them into two groups, nice to haves and must haves. We’ve made an example for you in the table below.

Must haves	Nice-to-haves
Being close to family members	Sunnier weather
Lower housing related costs	Change of lifestyle
Having an accessible home	Change of scenery

Whatever your individual goals are, downsizing should support them in some way, as it’s all about achieving your goals and making key aspects of your life easier.
 

Step 2: Declutter and Organise

Before you move home, try to give yourself plenty of time to declutter. Most of us collect a lot of things over the years — it’s completely normal. Taking your time can make it easier to decide what should come with you and what no longer needs to be kept.

Some items hold strong sentimental value, and choosing what to do with them can be emotional. Try not to put pressure on yourself during this stage. Sorting through what to keep, sell, donate or pass on can take a lot of energy.

Starting this process early can make moving day feel much easier. You’ll have fewer items to sort, more space to work with, and a clearer idea of what needs to be packed and taken to your new home.
 

Step 3: Research New Property Options

When downsizing for retirement, there are several types of homes you might consider, such as:

• Bungalows
• Small family homes
• Apartments
• Assisted living options

Before choosing a property, try to look beyond the home itself and think about the area around it. It can help to check things like:

• Local amenities, such as shops, GP surgeries and leisure facilities
• Public transport options
• How long it takes to reach places you visit often, such as family or the nearest airport
• Access to green spaces or nature
• The feel of the local community

Taking time to research the area can make a real difference to your comfort, independence and wellbeing later in life. A home that suits your needs — and an area that feels right — can help make downsizing a more positive experience.
 

Step 4: Review the Financial Side

Once you’ve explored your property options, it’s helpful to look at the costs involved in moving. These can include:

• Moving costs
• Storage costs
• Estate Agent fees
• Legal fees
• Survey and valuation costs
• Cleaning fees
• Stamp Duty
• Travel

To give you an idea of how much this can all cost, in 2024, Which? concluded that it costs on average £14,000 to move house in the UK. Your own figure may be higher or lower depending on where you live and the type of property you choose.

Downsizing can free up equity and reduce long-term expenses, but it’s still wise to plan for unexpected costs. Many people set aside a contingency budget of 10–25% of their total moving costs. This can offer extra peace of mind and help things run more smoothly if plans change along the way.
 

Step 5: Plan and Execute Your Move

Once you’re ready to move, putting a clear plan in place can help everything run more smoothly. A simple checklist is a good place to start. It can keep you organised, make it easier to track your progress and help you spot any issues before they become stressful.

Here’s a basic example you can follow:

Done	To do
Notify utility companies	Find a reputable removal company
Update address with Post Office	Find a suitable storage company
Meet with estate agent	Find a suitable cleaning company
Get help with decluttering from grandkids

 

Thinking About Downsizing: What to Keep in Mind

Like many big decisions in later life, downsizing has both pros and cons.

Pros include:

• Lower day-to-day housing costs
• The chance to move closer to family
• An opportunity to relocate to a new area
• Less upkeep and easier home maintenance
• A simpler lifestyle with less stress

Cons include:

• It can require a lot of planning
• Depending on your circumstances, moving house can be expensive
• Loss of space
• Leaving a home full of memories can feel emotionally difficult

If you decide to explore downsizing, take your time and plan carefully. Speaking with a professional adviser when you need support can help you feel more confident about your next steps.
 

Alternatives to Downsizing

Downsizing is one way to manage your home and finances in retirement. But it isn’t the only option. If you’d prefer to stay where you are, there are several alternatives that may help make your home or budget work better for you.

Home adaptations:
Simple changes can make day-to-day life easier. This may include adding grab rails, improving lighting or creating step-free access. Some people also convert a bathroom to suit changing mobility needs. These updates can help you stay in your home for longer.

Using existing savings or benefits:
Some people use savings to pay for repairs or improvements. It’s also worth checking if you’re eligible for later-life benefits. These may help with certain household or health-related costs.

Renting instead of owning:
Selling your home and renting somewhere smaller can reduce upkeep. Renting can also remove the need for ongoing maintenance. It may suit people who want fewer responsibilities but don’t want to commit to buying another property.

Equity release:
Equity release is another option some people explore. It lets you unlock tax-free money from your home while still living in it. The funds can be used for many purposes, such as home improvements, property adaptations or supporting your retirement income.

It’s not right for everyone, so it’s important to understand how it works and the risks. A regulated adviser can explain what it may mean for your situation.

Exploring these alternatives can help you decide whether downsizing feels right for you. It can also show whether staying in your home, with the right support, may suit your needs better.

Be financially aware
Lifetime mortgages are secured loans. Compound interest means the amount you owe can grow quickly. Equity release reduces your estate's value and may impact means-tested benefits. It may leave little or no property equity, reducing future financial options.
 

FAQs About Downsizing for Retirement

 

What is the best age to downsize your home?

There’s no single best age. It depends on your health, finances and personal plans.

Many people think about downsizing later in life, often from age 55 and above, when their needs or priorities start to change.

Everyone’s situation is different, so choose the time that feels right for you.
 

What is the first thing to do when downsizing?

The first step is to get clear on your priorities.

Think about what matters most — such as being closer to family, lowering your expenses or moving to a more manageable home.

Knowing your goals early on can make the rest of the process easier.
 

Are people happier after downsizing?

It varies from person to person.

Many people feel happier if downsizing helps them meet their goals, such as reducing costs or moving to a location they love.

Your experience will depend on your circumstances and what you want from your retirement.