Is Your House Your Pension?

Retired homeowners saw the value of their property rise £33 billion in the last six months, but investors should be wary of relying on their home to provide an income in retirement

Emma Wall 27 March, 2015 | 12:41AM

Pensioners have seen the value of their property grow by £33 billion in the last six months alone, meaning that retired homeowners now have a property portfolio worth £861 billion in the UK.

Thanks to falling interest rates and bond yields, income on cash and bonds has become ever more squeezed, while the rising property market has earned the average pensioner nearly £1,200 a month – far outstripping the majority of retirees' annuity payments or pension income.

According to Key Retirement, since January 2010 property owned by pensioners has increased by £81.27 billion, this equates to £17,323 each. The housing market was damaged by the credit crisis, with properties across the UK losing significant value. While homes in London and the South East were relatively quick to recover, in the last few months property values in more troubled regions such as Wales have climbed back up to pre-recession levels.

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About Author

Emma Wall  is former Senior International Editor for Morningstar

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