UK homeowners worry they won’t be able to afford their retirement without leaving their home

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Nearly four in ten homeowners (39%) think that unlocking housing wealth will be crucial to fund their retirement. Of those, almost a quarter (24%) are relying on their house because they don’t expect to have any private pension savings whatsoever, according to new research[1] from workplace pension provider NOW: Pensions.

This research comes in light of Government’s Housing White Paper, which sets out plans to tackle the UK’s housing shortage but fails to consider the issue of retired people looking to downsize. NOW: Pensions found that when looking to supplement their retirement income, around two-thirds (63%) of homeowners favour moving to a smaller property or cheaper area, over remortgaging or taking in a lodger.

Adrian Boulding, Director of Policy, NOW: Pensions said “Much of the long-awaited report addresses the issue from the point of view of young, working families, while largely ignoring the additional housing stock coming from retired people downsizing and selling their properties on to the next generation. What needs to be built, and which the report failed to address, is appropriate homes for the retired community”.

The research also found that over 1.8million UK homeowners who currently have a mortgage on their home, say they don’t expect to have paid off their mortgage when they do come to retire.

And 61% of Baby Boomers[2] that own their own home say they wish to downsize their property or move to a cheaper area as the favoured method to supplement their lack of pension savings when they retire.

Boulding continued: “Over the next ten years, we estimate that 7.7million[3] people will retire. Whilst it’s clear from our research that many UK homeowners remain optimistic that they can fill their income gap by trading down to a smaller house, they need to be cautious, as it’s a well-known fact that there is shortage of affordable and suitable homes that older people want to live in.

“We believe that workers should budget more than monthly minimum contributions into their workplace pensions savings, the earlier the better, to ensure they do not fall short of their own expectations when they come to retire in later life”.

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For further information:

Cheriton Lee
NOW: Pensions
Tel: 0203 826 1464

Lauren Roberts
NOW: Pensions
Tel: 0207 566 9760

NOW: Pensions @nowpensions

NOW: Pensions is one of the UK’s largest workplace pension providers with over a million members and tens of thousands of employers from a wide range of sectors. A subsidiary of one of Europe’s largest pension funds, Danish pension scheme ATP, NOW: Pensions entered the UK market in 2011 with a simple and cost effective workplace pension designed specifically with the auto enrolment market in mind.

NOW: Pensions was one of the first providers to achieve independent assurance of scheme quality in accordance with the master trust assurance framework (AAF02/07) introduced by The Pensions Regulator in conjunction with the Institute of Chartered Accountants in England and Wales (ICAEW).

Notes to editors

[1] Research conducted by Opinium online between 13 December 2016 and 16 December 2016 with 2,000 UK   respondents aged 18 and over;

[2] Baby Boomers defined as those aged between 50-69

[3] NOW: Pensions calculation based on ONS Population Data

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ATP comes to the UK pensions world with the highest commendations from the Danish trade unions, employers and government. NOW: Pensions' offering in the UK will be high quality, low cost, and honest and I'm proud to be associated with it. — John Monks, member of House of Lords and former General Secretary of ETUC and TUC
Why do we insist on having a choice of fund manager when the evidence shows there is usually no benefit to be gained…and there is always a negative impact in terms of cost? — Anthony Hilton financial editor of the Evening Standard writing in Pensions World, June 2013
I've known ATP for many years and have enormous respect for the effectiveness of their investment strategy. I'm convinced that NOW: Pensions can become a major player in the UK and look forward to being a part of that success. — Chris Daykin, the former Government Actuary
…We pride ourselves on our abilities to make the perfect match for both clients and workers. Our decision to appoint NOW: Pensions came as a result of wanting a quality workplace pension scheme that is structured, simple and easy for us to… — Ian Naylor, Legal Director of Randstad
“We were impressed with the simplicity of its scheme. The ease of implementation was also a big plus for us and has removed much of the administrative headache.” — Neil Tune, HR director at Fitness First