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Older homeowners don’t know how wealthy they are

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Written by: Christina Hoghton
04/12/2015
Homeowners aged 55 and over could be underestimating their property wealth by a massive £200,000.

Older homeowners across the UK are unaware of just how much their property is worth, according to a new study by the Equity Release Council.

It revealed that 60% haven’t had their home valued since they first bought it and, on average, this is 18 years ago.

The nitty-gritty

The Council’s research shows the average UK homeowner aged 55+ paid £132,534 for their existing property. Having lived there for an average of 17 years and 10 months, they now estimate it is worth £257,584.

However, according to the Office for National Statistics (ONS), the average UK house price has risen by 244% over the last 17 years and 10 months.

The average property among over-55 homeowners could therefore have a value of £456,259 today: almost £200,000 (£198,675) more than they estimate.

Asked to consider the role of pension savings and property wealth in funding later life, The Council’s research suggests four in five (80%) homeowners aged 55+ would consider using this housing wealth to get the most from their retirement.

Nigel Waterson, chairman of the Equity Release Council, said: “It is no secret that the property market has been kind to many homeowners, but it is remarkable to see how far people underestimate the potential size of their housing wealth, which puts the average pension pot in the shade.

“At a time when savings are scarce and retirees face an uncertain financial future with the end of generous final salary pensions, these findings prove just how important it is that property wealth plays a role in financial planning for later life. They also show a large number of people are looking for help to decide how using their savings, using equity release or downsizing can work best to meet their individual needs.”

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