More than half of households (51%) aged 60+ could fund a better, longer, retirement by accessing their housing wealth, according to an independent report from Fairer Finance, commissioned by the Equity Release Council.
The report finds accessing housing wealth could unlock £23bn annually in additional spending power by 2040 and help to bridge the growing regional divide in later-life financial readiness.
This is even more pertinent in regions such as the North East who have the lowest average annual pension income, equivalent to £16,380, some £15,320 away from the recommended £31,700 ‘moderate’ retirement standard set by Pensions UK.
Yet, based on later life lending market data, the median house price in the region is £261,692, among customers in H1 2025. If homeowners were to release 40% equity in a property of this value they could top up their retirement income to the moderate amount for six years, or could fully fund 3.3 additional moderate years in retirement.
Similarly in the West Midlands, where the average annual pension income for a single person is £16,440, which is £15,620 shy of the amount needed annually for a moderate retirement, property owners could unlock £98,800 and top up their retirement income for 6.3 years or fully fund an additional 3.1 years to a moderate level.
At the other end of the scale in London where average property prices currently sit at £561,000, but annual pension income sits at £17,160, bricks and mortar is a substantial asset. Taking out 40% equity in a property of this value is equivalent to £224,400, helping retirees to bring their retirement income to a moderate standard for 15.4 years, or wholly sustain an additional 7 years in retirement to a moderate standard.
| Region | Weekly Net Pension Income (Single, After Housing Costs are deducted) | Avg. Annual Pension Income (Single, After housing costs are deducted) | Shortfall between avg. income and moderate retirement (£31,700) | Median House Price | Equivalent of 40% equity |
| North East | £315 | £16,380 | £15,320 | £164,000 | £65,600 |
| West Midlands | £320 | £16,440 | £15,260 | £247,000 | £98,800 |
| North West | £325 | £16,900 | £14,800 | £212,000 | £84,800 |
| Yorkshire & Humber | £326 | £16,952 | £14,748 | £204,000 | £81,600 |
| London | £330 | £17,160 | £14,540 | £561,000 | £224,400 |
| East Midlands | £339 | £17,528 | £14,172 | £239,000 | £95,600 |
| Scotland | £343 | £17,836 | £13,864 | £192,000 | £76,800 |
| East of England | £344 | £17,888 | £13,812 | £338,000 | £135,200 |
| South West | £366 | £19,032 | £12,668 | £302,000 | £120,800 |
| South East | £370 | £19,240 | £12,460 | £383,000 | £153,200 |
(Assumes 40% equity released, in line with current market levels among later life lending sector where consumers typically can release up to 40% LTV. For illustrative purposes, excludes fees/interest)
| Region | Equivalent of 40% equity | Shortfall between avg. income and moderate retirement (£31,700) | Years equity release could top up current retirement income to moderate retirement income | Full additional years funded to a moderate level of retirement income |
| London | £224,400 | £14,540 | 15.4 | 7 |
| South East | £153,200 | £12,460 | 12.3 | 4.8 |
| East of England | £135,200 | £13,812 | 9.8 | 4.3 |
| South West | £120,800 | £12,668 | 9.5 | 3.8 |
| East Midlands | £95,600 | £14,172 | 6.7 | 3 |
| West Midlands | £98,800 | £15,620 | 6.3 | 3.1 |
| North West | £84,800 | £14,800 | 5.7 | 2.7 |
| Yorkshire & Humber | £81,600 | £14,748 | 5.5 | 2.6 |
| Scotland | £76,800 | £13,864 | 5.5 | 2.4 |
| North East | £65,600 | £15,320 | 4.3 | 2 |
To unlock the full potential of housing wealth in later life, the report ‘How can housing wealth bridge the later life funding gap’ outlines five key reforms:
- Government should facilitate a substantial increase in the supply of suitable and desirable retirement properties, located in the communities where people in later life wish to live. This should also include a better framework for consumer protection, including looking at innovative tenure models that promote the use of housing wealth to improve affordability and health outcomes.
- Government should lower the financial cost of downsizing by reducing stamp duty for people in later life. By facilitating more downsizing and freeing up family homes, the government can recoup some of the lost tax revenues through an increase in upsizing stimulated by greater supply of larger housing stock.
- Government and regulators should normalise the use of housing wealth to maintain living standards in later life. MoneyHelper and Pension Wise should embed housing wealth as a central part of later life advice and guidance. Government and public agencies should invest in public information campaigns to break down the stigma and normalise the use of housing wealth in retirement.
- Government and regulators should develop a personalised service for people, which brings their pension and housing wealth into a single view. Once pension dashboards are completed, the government should look to build in housing wealth to give consumers a clear view of their financial position and options as they enter later life.
- The FCA should reform the regulation around later life advice, to break down silos and ensure all consumers are supported to maximise the use of all their assets as they approach retirement.
Jim Boyd, CEO of the Equity Release Council, comments: “The UK’s retirement landscape is changing fast. Many people have more property wealth than housing wealth and property will form an increasingly important asset to fund longer lives in retirement. Yet, too few people know it’s an option or feel confident exploring it.
“Our findings shine a light on the potential for housing wealth to provide better retirements for people across the UK, especially in regions like Yorkshire and the Humber and the North West, where pension incomes are lower but property wealth remains strong. Millions of older homeowners are asset-rich but income-poor, and are often unaware that their home could be the key to a more secure retirement.
“The estimate that people may unlock £23bn a year by 2040 highlights how transformative the use of property wealth could be for our rapidly ageing population and for the wider economy by increasing older people’s spending power. We now need to break down the barriers to using housing wealth confidently and safely, from outdated perceptions to fragmented advice.
“This isn’t about pushing people in one direction. It’s about giving everyone access to trusted guidance and flexible options, so they can make informed choices that work for their circumstances, wherever they live.”
James Daley, managing director of Fairer Finance, said:
“The relaunch of the Pensions Commission shows that this Government understands the severity of the impending later life crisis. While the Commission will hopefully unlock new ways to get people saving more for retirement, its’ actions will come too late for those who are already approaching later life without adequate provision.
“For many in this generation, using their housing wealth will be a vital lifeline to support a decent standard of living in later life. But there’s still work to be done to ensure people can access their housing wealth.
“It’s crucial that the Government does not lose sight of the problem facing the next generation of retirees, while it looks for a solution for future generations. Our report makes a range of pragmatic policy suggestions to ensure more people can use their housing wealth in retirement – and we urge Ministers to act on these as soon as possible.”
