Homeowners in England and Wales could nearly double their retirement savings by tapping into property wealth, research by Legal & General Retail has revealed.
The research found that homeowners could release an average of £69,600 through equity release, a 20% increase from five years ago.
This would supplement the average pension pot of £72,000 and provide an extra five years worth of retirement income.
House prices in England and Wales have increased by 20% over the past five years, now averaging £290,000.
The most significant growth occurred in the East Midlands and Wales, with house prices rising by an average of 26% and 25%, respectively.
Legal & General’s data indicates that accessing property wealth through equity release would grant retirees an overall fund of £141,600.
Certain regions have seen particularly sharp increases in property values.
Blaenau Gwent saw a rise of 49% in property value, followed by Merthyr Tydfil at 46%, Broxtowe at 39%, and Salford at 38%.
Lorna Shah, managing director at Legal & General Retail Retirement, said: “Many retirees are not able to maintain the lifestyle they want with their existing pension pots alone.
“This will only become a greater challenge as people live longer and have to meet increased costs, such as those associated with residential care.
“Property wealth, using products like equity release, could increasingly be integrated into retirement planning in the future, as a larger number of homeowners turn to the value held in their bricks and mortar to bolster their retirement funds.
Shah added: “If more people look to property wealth to fund their retirement, this could have interesting regional implications, as local house price fluctuations impact how much homeowners have at their disposal.
“Some areas of the country might end up taking a greater proportion of their retirement funds from their homes as a result.”
