• March 28, 2024
 Majority of downsizers not money motivated

Majority of downsizers not money motivated

New research has revealed that the majority of downsizers are motivated by convenience as opposed to a cash reward.

According to Prudential, just under half (47%) of homeowners aged 55 or older are intending to downsize in later life. This demographic – made up of over 3.9 million individuals – predict that they’ll raise around £112,000 in equity by moving to a cheaper property, whilst 11% believe that they’ll make over £200,000.

The financial boost gained from downsizing is set to play a key role in future plans for 26% of respondents, who stated that were only making the move to increase funds. 13% of those asked, stated that if they didn’t downsize, they wouldn’t be able to retire at all.

Of those who expect to raise money through downsizing, 60% will use the cash to bolster retirement funds whilst 13% intend to use the funds to help their children gain access to the property ladder.

Money, however, was not the main motivator for the majority of downsizers, with 74% stating that the convenience of having a smaller home was the key reason for the change.

Whilst many are choosing to downsize as they approach retirement, a large number are also being deterred by factors such as high house prices and a fall in suitable properties.

Commenting on the figures was Vince Smith Hughes. The retirement income specialist at Prudential stated: It is interesting to see that these figures challenge the common theory that ‘my house is my pension’. Although we see a large proportion of those taking equity from their homes to boost their retirement incomes, most people have accepted that the main reason they need to move home in later life is for convenience.

“With the average amount of equity raised likely to be just over £100,000, and with many other demands on this cash – such as helping children, paying off debts and putting money aside to pay for care in the future – it is clear that for most people the best way to fund retirement is through saving as much into a pension as early as possible in their working lives.

“The results also show that many people are worried about that the costs involved in moving house may eat into the equity they’ll be able to take from their home. Most people who are considering making major financial decisions, such as selling their home, in the run up to retirement should benefit from a consultation with a professional financial advisor and the free guidance on their pension options available from the Government’s Pension Wise service.”

Georgia Owen

Georgia is the Senior Content Executive and will be your primary contact when submitting your latest news. While studying for an LLB at the University of Liverpool, Georgia gained experience working within retail, as well as social media management. She later went on to work for a local newspaper, before starting at Today’s Wills and Probate.