The ‘HIPpies’ (home is pension) generation has doubled in the last year, according to LV=, as 52% of working homeowners over 50 (3.5 million people) plan to use the equity in their home to fund their retirement – compared to 28% in 2012.
LV=’s 2013 HIPpies report reveals that the value of the average working over 50s’ property comes in at £258,000 – more than £15,000 higher than the national average of £242,000. As 75% of home-owning over-50s (5 million) own their property outright and those with a mortgage already have £149,640 worth of equity built up in their home, for many unlocking the capital in their home would provide them with a significant income boost, LV= explains. The increase in people using their properties to fund their retirement is likely to have been driven by increasing house values over a long period, and low interest rates on savings.
As well as building up equity in their homes, over-50s have spent an average of £30,000 each creating their ‘perfect’ home, in the two decades they have lived in their property. Having made such an investment, 38% over-50s say that they want to stay in their current home for the rest of their lives, and this figure rises to 47% of all retirees.
Furthermore, of the 9.6 million British homeowners aged over 50, 88% feel a strong connection to where they live and consider themselves a part of the fabric of the community in which they live and would miss their friends if they were to move (39%).
Vanessa Owen, Head of Annuities and Equity Release said: “The number of over 50s who plan to use their home as their pension has risen steadily since we first launched our report in 2010 and it is clear that for a large section of the population their home is will play a key role in funding their retirement.
“Property is often the largest asset someone has when they reach retirement, especially if they have lived there for quite a while, and will often significantly outweigh any pensions savings they have. As our report shows, having invested a considerable amount of time and money in their property, many would prefer to stay where they are and access the cash tied up in their home without having to move.”
