Older homeowners against downsizing despite money worries
Over half of adult children between 30 and 55 years old are worried about their parents’ finances, while around 55 per cent of over-55s can never see themselves moving, two surveys have found.
The findings suggest that while downsizing is often seen as a key development for older homeowners, only a minority are likely to consider it.
SunLife’s home sentiment report surveyed 1,000 homeowners in their 50s, 60s, 70s and 80s and found that on average, respondents had been living in the same home for 20 years, with half for more than 20.
As a result, the majority did not want to downsize, even though many were worse off than they thought they would be.
One in five respondents said they were worse off than they expected to be at this stage in life, and while downsizing could offer a way to free up cash to ease the financial strain, 62% still said they would not want to downsize.
For one in five, the main reason for not wanting to move was that their home held ‘too many memories’.
Simon Stanney, equity release service director at SunLife, said: “Most of our respondents have been in their homes for at least two decades, and in that time have celebrated hundreds of happy family occasions.
“And despite the fact that the over 55s are a property rich, cash poor generation, who could free up a lot of cash by downsizing, our research reveals that most cannot bear the thought of giving up their homes and with it, all the memories they had.
“On average, people over 55 have seen their homes increase in value by around £135,000, so for people over 55 who own their own home and are looking for a cash lump sum, unlocking some of the value in their homes via equity release rather than by moving, could offer the solution.”
Worried by parents finances
According to the latest research by More 2 Life, almost a quarter of adult children aged 30 to 55 were worried that the state of their parents’ finances would stop them from fully enjoying their retirement.
And 20 per cent were concerned about their parents running out of money altogether during retirement.
Meeting care costs for parents was a major concern for 18% of respondents with 19% believing their parents would run into debt in five years if one or other required care.
Over a quarter would be keen to provide financial support or a loan if their parents needed it with 12% suggesting they might take out a personal loan or later life mortgage.
Dave Harris, chief executive officer at More 2 Life, said the research highlighted not only that adults worried about their parents’ finances, but they would prefer them to take proactive steps to improve their financial situation if they are struggling.
He added: “While the equity release industry has experienced historic levels of lending in recent years, it’s crucial for lenders to continue working with advisers to raise awareness among families of the benefits of unlocking property wealth.
“Inheritance is a family concern but so is the fact that the older generation enjoys their retirement and can pay for costs such as care.”