House prices have climbed by 67% over the last decade at a time when people on pension incomes have received minimal increases in real standards of living, new analysis by more2life has shown.
The lender highlighted data from the Office for National Statistics (ONS) which showed that people on pension incomes received a 1% per annum increase, accounting for inflation, in average weekly pension income between 2013 and 2022.
This data also revealed that over this period, average weekly pension income grew by £29, from £320 to £349.
However, the average UK house price jumped by 67% over this same period.
more2life said that many over-50s will own properties which have seen their value increase significantly, and the lender suggested that accessing this housing wealth could provide retirees with additional income or be used for discretionary spending.
“Our analysis shows that while pensioners have received very little in ways of income growth over the last decade, the value of their homes have accrued substantially,” more2life managing director, Ben Waugh, commented.
“On the one hand, rising house prices can be an encumbrance for borrowers, with mortgage repayments often rising in tandem. However, it does mean homeowners will have a larger sum of equity tied up in their property, should they wish to unlock it – funds that can either be used to augment stagnant pension pots, help grapple with higher mortgage repayments, or even be put towards financing home improvements or a family holiday.”
Waugh added that most UK homeowners have over £70,000 worth of equity tied up in their property, and that equity release can serve as a vehicle to unlock these funds.
He added: “Before coming to any conclusions, borrowers should seek the expert guidance of an independent financial adviser. It is important individuals are made aware of all the options that are open to them, and crucially, what option will produce the best outcomes for their personal needs – even if this means being advised against later life lending.”
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