Retirees don’t want to downsize to save

Sarah Davidson

August 16, 2012

Stephen Lowe, group director of external affairs and customer insight at Just Retirement, said the traditional view is that downsizing is a way older people can free up some capital and cut their living costs but most people are reluctant to take this option.

He said: “What seems an easy financial decision from a practical point of view is often a huge emotional wrench that people seem keen to avoid.”

The report The role of housing equity in retirement planning found that the majority of homeowners were against moving from the family home.

Some 55% had lived in their homes for more than 25 years and a further 24% had bought between 16 and 25 years ago.

Of those with between five and one year to retirement about half said they would rather sell up than use equity release but this number fell to just over a third of those in retirement.”

Lowe added: “There was a widespread feeling that downsizing was a major upheaval and probably worked best if people did it relatively early in retirement or in response to poor health. But interestingly, a few had downsized and been disappointed by the results after the costs were taken into account.

“People were also very aware that there are a lot of retirees have the same idea and there is a very restricted supply of the right kind of homes in the right areas. This is not just a consequence of the current slow market.”

As the demographic bulge of the baby boom generation enter retirement, it is difficult to see how this lack of suitable homes is going to be improved, claimed Lowe.

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