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.
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
Notes to editors
Established in 1836, L&G is one of the UK's leading financial services groups and a major global investor, with £1.2 trillion in total assets under management (as at FY25) of which c. 43% (c. £0.5 trillion) is international. We have a highly synergistic business model, which continues to drive strong returns. We are a leading player in Institutional Retirement, in Retail Savings and Protection, and in Asset Management through both public and private markets. Across the Group, we are committed to responsible investing and dedicated to serving the long-term savings and investment needs of customers and society.
L&G’s Retail business is a leading provider of retirement and protection solutions. We aim to support our 12.4 million customers throughout their financial lifetimes.
We focus on helping the customers of today and tomorrow achieve better long-term outcomes. We use the latest technology to connect with them quickly, efficiently and wherever possible in highly personalised ways.
As at the first half of 2025, our workplace pension platform served 5.6 million members, with net flows of £4 billion. Retail annuity sales were £745 million and lifetime mortgage advances (including retirement interest only mortgages) were £104 million. Our retail protection gross premium income was £771 million.