According to the research, those aged 55 and over in England currently own £1.5trn of property.
This amount of property wealth is £0.1trn more than Italy’s annual GDP and is only £0.6trn less than the UK’s £2.1trn annual GDP.
With the current average cost of a UK house standing at £229,383 and 6.3 million over-55s owing their homes outright, the research says the £1.5trn figure puts English over 55s as some of the most property rich in the world.
According to Age Partnership, these figures highlight the increasing need to factor the cash locked-up in property into retirement planning.
“This stored wealth cannot be ignored,” said Simon Chalk, an equity release expert at Age Partnership. “Housing must become a primary part of retirement financial planning and we need to open up more channels to help the over-55s benefit from it.”
Indeed according to the research, even with a modest 2% growth to property values, some £2.9trn will be held in property wealth in two decades time.
“Pensions will continue to cause a headache as the population ages,” Chalk added. “Adding property wealth to the mix could help alleviate that pressure. Equity release is already taking a starring role as it provides an alternative to downsizing but still enables over-55s to release cash from their homes.”
Chalk said the Financial Conduct Authority’s (FCA) recent move to relax the rules to providers who offer innovative lifetime products is a positive step forward in recognising the importance of the equity release market and acknowledging the increasing demand.
He said: “As people continue to look for new ways to access their existing cash and assets as they reach retirement, keeping ahead of the curve will allow a more efficient and transparent process for all those involved.”
