Housing wealth cannot be an afterthought in retirement planning – Harris

For decades, retirement conversations have focused primarily on pensions, investments and savings, and while these undoubtedly remain essential, they tell only part of the story. For millions of older homeowners, their largest asset is their property, yet housing wealth continues to sit outside many mainstream financial planning discussions.

Recent research from Fairer Finance highlights why this needs to change, with its latest findings suggesting that 15 million people are under-saving for retirement, while one in 10 working-age consumers is on course to face poverty in later life. Its previous research also found that 51% of households aged 60 and over may need to access housing wealth by 2040 to maintain their desired standard of living.

These figures reflect a broader shift in how retirement is funded, given that defined benefit pensions are far less common than they once were, people are living longer, and many face a growing gap between the retirement they want and the retirement their existing savings can realistically support. Yet despite these changing realities, housing wealth remains largely disconnected from the advice process.

That is particularly concerning when we look at some of the groups most exposed to retirement income shortfalls. Fairer Finance’s research found that 65% of single female homeowners aged 55-79 have incomes below the Pensions UK moderate living standard, compared with 44% of single men. However, both groups hold average housing wealth of around £225,000, meaning that around 1.4 million single female homeowners fall below the moderate living standard, despite many holding significant property assets.

The message is clear: financial vulnerability and property wealth are not mutually exclusive.

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Lifetime mortgage take-up remains low

For many consumers, housing wealth could provide the flexibility to supplement retirement income, repay existing debts, fund care needs, make home adaptations, support family members or improve overall financial resilience. As a result, the challenge isn’t the availability of solutions, it’s that too many consumers are never made aware of them.

At More2life, we have long argued that the best consumer outcomes can only be achieved when all appropriate options are considered. Yet lifetime mortgage lending totalled just £2.6bn last year, suggesting many advisers and mortgage brokers are still not having meaningful conversations about later life lending with clients who could potentially benefit.

There are several reasons for this.

The first is familiarity, because while awareness of later life lending has improved significantly, misconceptions remain and some advisers still view lifetime mortgages through the lens of products available decades ago, rather than recognising the flexibility built into many modern solutions. Ultimately, features such as voluntary repayments, drawdown facilities and downsizing protection mean today’s products can play a valuable role within a wider retirement strategy.

The second challenge is the siloed nature of advice.

Too few advisers hold later life lending permissions, while retirement planning, mortgage advice and financial planning often remain separate disciplines – yet consumers do not think about their needs and objectives in silos, they simply want to know how to use their assets most effectively to achieve their goals.

Whether the answer is pension withdrawals, investment income, downsizing, conventional borrowing, a retirement interest-only (RIO) mortgage or a lifetime mortgage is almost secondary – what matters is that every suitable option is identified and discussed.

This is why I believe the industry needs a more structured approach.

An alternative approach

The Financial Conduct Authority (FCA) has consistently emphasised the importance of holistic advice and good consumer outcomes, and Fairer Finance has already called for regulatory changes that would allow consumers to consider all of their assets when making retirement decisions.

I would go one step further.

Mortgage brokers and financial advisers should be required to flag specialist later life lending options whenever relevant circumstances arise – and to be clear, that’s not the same as recommending a lifetime mortgage in every case, and some consumers will ultimately find another solution is more suitable. However, every consumer deserves to know that housing wealth is an option and to understand when specialist advice may be appropriate.

The bottom line is that without greater intervention, we risk continuing to leave substantial housing wealth untouched while millions face unnecessary financial pressures in later life.

The encouraging news is that consumer attitudes are already evolving, with Fairer Finance’s data highlighting that a quarter of homeowners aged 55-79 say they’d consider using property wealth to fund care at home, 24% would use it to boost pension income or savings, and others would use it to pay for home adaptations or care costs.

This is because consumers increasingly recognise that their home is more than just a place to live; it’s a financial asset that can support their objectives throughout retirement.

The advice profession now has both an opportunity and a responsibility to ensure those conversations become part of mainstream retirement planning, because if we’re serious about delivering holistic advice and better outcomes, housing wealth cannot remain an afterthought.