You are here: Home - Investing -

Pension reforms could plug £1.2bn each year into housing

Written by: Hannah Uttley
Some £1.2bn could be invested into the housing market annually over the next 10 years by people aged 55 to 64 off the back of the pension reforms, Savills research has estimated.

Research published by the estate agent estimated that 29 per cent of people aged 55 to 64 have a current defined contribution (DC) pension with an average pot of £25,000, totalling £120bn for the age group.

However, Savills said the skewed distributions of pension wealth meant only the top 7 per cent of these pension holders would be able to afford to buy an average priced property outright, setting them back around £180,000.

In total it said 10 per cent of DC pension wealth could be plugged into the housing market by pensioners aged 55-64, giving a possible investment of £1.2bn when split over 10 years.

Savills pointed out that using these estimates, pensioners’ contribution to the market would equate to just 0.5 per cent of recent market turnover and around 10,000 transactions per year.

Neal Hudson, Savills research, said: “At these levels, the reforms will have a limited effect on national house prices, but we may see a short-term burst of activity in lower value markets. “With many of the wealthiest pension holders living in London and the south of England, it remains to be seen how many will want to deal with the hassle of investing outside of their local markets.”

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

The savings accounts paying the most interest

It’s time to get your finances in shape, and moving your cash savings to a higher paying deal is a good plac...

Everything you need to know about being furloughed

Few people had heard of ‘furlough’ before March 2020, but the coronavirus pandemic thrust the idea of bein...

The experts’ guide to sorting out your personal finances in 2021

From opting to ‘low spend’ months to imposing your own ‘cooling-off period’, industry experts reveal t...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Having a baby and your finances: seven top tips

We’re guessing the Duchess of Cambridge won’t be fretting about maternity pay or whether she’ll still be...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Money Tips of the Week