Prudential has reported that over 3.9 million over-55s plan to downsize to a cheaper property later in life, but it is convenience rather than the cash that is their biggest driver.

The research found that 47% of over-55 homeowners planning to sell and move to cheaper homes in later life. On average they expect to raise around £112,000 in equity by downsizing with around one in 10 (11%) expecting to make more than £200,000. 13% said they could not afford to retire unless they downsized.

However, the main reason for downsizing is the convenience of running a smaller home in retirement. 74% rated convenience as their main reason for downsizing compared with just 28% who said they were doing so to mainly release cash for retirement. Meanwhile, 34% said having a smaller garden was a major motivation.

But worries about a shortage of homes suitable for retirement, fees and high property prices are the major reasons deterring some older homeowners from downsizing, the study found.

A lack of suitable available housing is the main reason over-55s believe downsizing is not more popular – 38% blame the lack of suitable houses while 24% blamed the cost of moving in terms of stamp duty, solicitors and estate agents, and 17% say high house prices put people off.

Of those who expect to raise money from downsizing 60% will use it to boost their retirement funds and improve their standard of living. 47% will use the cash for travelling more, while (13%) want to release equity to help their children buy a house and 14% will simply give the cash to their children.

Vince Smith-Hughes, retirement income spokesperson at Prudential, said: “It is interesting to see that these figures challenge the common theory that ‘my house is my pension’. Although we see a large proportion of those taking equity from their homes to boost their retirement incomes, most people have accepted that the main reason they need to move home in later life is for convenience.

“With the average amount of equity raised likely to be just over £100,000, and with many other demands on this cash – such as helping children, paying off debts and putting money aside to pay for care in the future – it is clear that for most people the best way to fund retirement is through saving as much into a pension as early as possible in their working lives.

“The results also show that many people are worried about that the costs involved in moving house may eat into the equity they’ll be able to take from their home. Most people who are considering making major financial decisions, such as selling their home, in the run up to retirement should benefit from a consultation with a professional financial adviser and the free guidance on their pension options available from the Government’s Pension Wise service.”