Press release

Homeowners could nearly double their retirement savings by combining pensions and property wealth

For older homeowners, property wealth could help to boost the amount of money available to fund their retirement.

9 Dec 2024


Full press release
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  • Homeowners in England and Wales could release an average of £69,600 worth of equity release from their homes using equity release– a 20% increase on five years ago
  • This could compliment the average pension pot (£72,000) and add five extra years’ worth of retirement income
  • The areas that have seen the greatest increase in property wealth include Blaenau Gwent and Merthyr Tydfil in Wales, Broxtowe in the East Midlands and Salford in the North West

New analysis of Office for National Statistics (ONS) data by Legal & General Retail1 has found that homeowners could nearly double the amount of money they have on hand for retirement by using their property wealth.

Housing wealth continues to rise

In the last five years, house prices in England and Wales have increased by 20%, to an average of £290,000.

The most significant growth has been in the East Midlands and Wales, where house prices have increased by an average of 26% and 25% respectively, adding more than £40,000 to the overall value of the average property.

Property could add five years’ worth of retirement income

For older homeowners, property wealth could help to boost the amount of money available to fund their retirement. The average pension pot at the point of retirement for Legal & General drawdown customers is £72,0002 but if they were to access their property wealth using equity release, for instance, they would receive an average of £69,600 (24%). This would create an overall retirement fund of £141,600.

This could improve the prospects of many pensioners by adding an equivalent of five additional years’ worth of retirement income3.

The regional picture

While homeowners in London and the South East continue to have some of the highest value properties in the country, house price growth has plateaued in these areas in recent years. Meanwhile, homeowners in other areas of the country have seen significant increases in the value of their properties.

Areas like Blaenau Gwent (+49%), Merthyr Tydfil (+46%), Broxtowe (+39%) and Salford (+38%) are some of the most increased in terms of overall property values [top 20 listed below].

Lorna Shah, Managing Director, Retail Retirement: "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.

“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 20 local authorities with the biggest increase in house price values over the last five years

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%

East Midlands

Leicester

£232,000

£55,680

34%

East Midlands

Gedling

£240,000

£57,600

33%

North West

Bolton

£180,000

£43,200

33%

West Midlands

Sandwell

£200,000

£48,000

33%

West Midlands

Wolverhampton

£200,000

£48,000

33%

East Midlands

Nottingham

£186,500

£44,760

33%

Wales

Isle of Anglesey

£225,000

£54,000

32%

North West

Bury

£225,000

£54,000

32%

West Midlands

Dudley

£218,000

£52,320

32%

North West

Rochdale

£178,000

£42,720

32%


References

1Legal & General analysis of Office for National Statistics, Median house prices for administrative geographies, September 2024.

2Legal & General, workplace pension data.

3Based on PLSA’s Retirement Living Standards’ minimum income for a single person £14,400 per year.

Further information

microsoftteams image

Claire Byrd

Senior PR Manager

Retail

Notes to editors