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Almost a third of over-45s plan to downsize in next five years

Nick Cheek
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Nick Cheek

Around 29 per cent of over-45s plan to downsize in the next five years, but 70 per cent said they are keen to stay in their current home for the rest of their lives.

Key Later Life Finance, which surveyed around 1,000 homeowners aged 45 or over, noted economic factors could be driving more to downsize.

Almost half of those who were looking to downsize said that upkeep would be easier, while for 38%, it reduced their running costs.

More than a quarter said that it would improve their retirement finances.

One in five said the cost of living impact on running a home had pushed them to downsize, while 8% did so to release cash to support their families.

Around 5% said they used the proceeds as a way to repay debt.

Community and home important considerations

Within the 70% who did not want to downsize, 31% noted that the house they live in is right for them and a smaller house would not work.

Around a quarter said they were in the “forever home” and did not want to move.

Nearly a fifth said they were attached to the community they live in, and 22% said that the idea of moving was exhausting.

Around 16% said they did not think downsizing would have little financial benefit.

Attachment to their community grows with age, growing to 52% for those aged 75 to 84, which is nearly double those aged 45 to 54 bracket.

Downsizing is not the default

Will Hale, CEO of Key, said downsizing could be an opportunity to release value tied up in homes and find a more appropriate property.

However, he said that this research suggested their home and community “provides them with confidence, reassurance and security with the main driver behind any potential move being economic necessity”.

“For some, downsizing is the right answer. However, for others finding a way to boost their retirement finances while staying in the property they love – and can afford to adapt – and with the community they know is a better option. A home is much more than a roof over your head and can provide security, confidence and reassurance as people age,” Hale added.

He said that speaking to specialist adviser could help explore a variety of later life options, and the default should not be to downsize.

“Choosing to take out a later life lending product also does not preclude downsizing in the future either. Indeed, modern equity release products include features such as downsizing protection and with the ability to serve interest, older borrowers can carefully managing their borrowing to ensure they keep all options open as their circumstances may change through the years,” Hale noted.