Retirees can almost double their savings pots through releasing equity from their property, research reveals.
Homeowners can invest an average of £69,600 worth of property wealth into retirement earnings, a fifth more than five years ago.
The amount could equal five years of cash to enjoy in post-working life, according to research from Legal and General (L&G).
House prices have shot up to an average of £298,000, and while that has priced out many prospective buyers, those with a home can benefit from the state of the market.
The average drawdown when retiring is £72,000 among L&G customers, but with equity release, they can save an extra £69,900, leading to a total in retirement of £141,600.
Homeowners in London and the South East of the UK will have the most money to make from their property, while two regions in Wales – Blaenau Gwent and Merthyr Tydfil – have seen the amounts surge by 49% and 46% respectively since 2019.
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Lorna Shah, managing director of L&G retail retirement, said: “Many retirees are not able to maintain the lifestyle they want with their existing pension pots alone. This will only become a greater challenge as people live longer and have to meet increased costs, such as those associated with residential care.
“Property wealth, using products like equity release, could increasingly be integrated into retirement planning in the future, as a larger number of homeowners turn to the value held in their bricks and mortar to bolster their retirement funds.”
Shah added: “If more people look to property wealth to fund their retirement, this could have interesting regional implications, as local house price fluctuations impact how much homeowners have at their disposal. Some areas of the country might end up taking a greater proportion of their retirement funds from their homes as a result.”
Top regions for equity release
| Region | Local authority | House prices (2024) | Average equity release (24%) | Change in the last five years |
| Wales | Blaenau Gwent | £128,000 | £30,720 | 49% |
| Wales | Merthyr Tydfil | £137,000 | £32,880 | 46% |
| East Midlands | Broxtowe | £247,500 | £59,400 | 39% |
| North West | Salford | £220,000 | £52,800 | 38% |
| North West | Trafford | £350,000 | £84,000 | 37% |
| North West | Oldham | £180,000 | £43,200 | 36% |
| North West | Tameside | £195,000 | £46,800 | 36% |
| Wales | Neath Port Talbot | £155,000 | £37,200 | 35% |
| Wales | Caerphilly | £174,975 | £41,994 | 35% |
| North West | Manchester | £235,000 | £56,400 | 34% |
This article was first published on Mortgage Solutions‘ sister site, YourMoney.com. Read: How retirees ‘can double’ savings pot with equity release boom
