Just over half of UK adults would be willing to delay retirement to ensure they own their home outright, with people prioritising homeownership over pension, according to research from PensionBee.

A survey of 2,000 UK adults found that 45% viewed outright homeownership as the most important factor for retirement security, compared with 36% who prioritised having a large pension pot. When forced to choose, 51% said they would delay retirement to own their home outright, while only 9% would retire earlier if that meant renting in later life.

PensionBee said renting a two-bedroom home throughout retirement could cost between £200,000 and £400,000, compared with median private pension wealth of around £154,000 among people aged 60 to 64. The average UK house price is now £270,000, rising to £553,000 in London.

The findings come as the UK faces a growing number of retirees with housing costs. A Pensions Policy Institute report commissioned by the ABI warned in July that the pension system was built around the assumption that most people would enter retirement without housing costs because they owned their homes outright. The report projected that almost two million more pensioner households could be renting by 2044.

Longer mortgage terms are also increasing the likelihood that people will still be paying off their homes as they approach retirement. The average mortgage term for a first-time buyer (FTB) has increased from 25 years in 2005 to 31 years in 2025, while half of new FTB mortgages now run for more than 30 years, compared with around a quarter a decade ago. With the average FTB aged 32, the typical mortgage would therefore run until around age 63, just three years before state pension age.

The online pensioner provider said prospective FTBs could also risk weakening their retirement savings by prioritising a deposit. Its modelling found that redirecting £20,000 from a pension at age 30 to fund a first home could result in more than £120,000 of lost retirement savings by age 67.

Meanwhile, 51% of respondents aged 25 to 34 said they would consider a government scheme allowing pension savings to be accessed for a first home purchase.

Only 19% of respondents said they were very confident their pension would cover their housing costs in retirement, while 37% were either not confident or had not considered the issue.

Becky O'Connor, head of pensions at PensionBee, said: "These findings reflect a housing crisis that has reshaped how a generation thinks about retirement. People prioritising homeownership over pension saving might be making a rational financial decision, as owning your home outright removes one of the biggest costs in retirement.

“However, the problem is that rising house prices have made that goal significantly harder to reach, and the consequence for many will be that retirement starts later, or that they arrive at retirement still carrying housing costs they had hoped to have cleared. For many, the home ownership goal will continue to evade them and then the question will be can they boost their retirement savings by enough to cover the cost of renting.

“The difficulty of achieving the twin major life goals of home ownership and decent pension savings has never been so apparent and the prospect that a sizeable proportion of people will not manage to achieve both is something that policymakers cannot ignore."

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