A study has found that the average 50-plus homeowner in the UK has an equivalent of £56,574 worth of unused space in their house
A study has found that the average 50-plus homeowner in the UK has an equivalent of £56,574 worth of unused space in their house. With the average house price coming in at £276,393and a typical house size of 165.6 square metres, each square metre equates to the value of £1,669.
The older generation are left with 34 square metres of empty space in their homes – which typically included two unoccupied rooms – after their children have moved on, according to the study which included 2,000 adults.
However, after two years and seven months of the property lying unused, they transform this space into a personal gym, office or even a craft room.
The founder and CEO of Equity Release Supermarket, Mark Gregory, said their survey found there is plenty of space in the family homes of empty nesters which is going to waste, and it’s not just space – but possible financial wastage.
Gregory said there tends to be fond memories and a certain amount of nostalgia linked to a property, so it’s difficult for people to say goodbye to a family home.
He said that one option for empty nesters to raise equity is to simply sell the family home and down-size. However, with a reluctance to say goodbye to all those memories, many, incorrectly believe that downsizing is the only way to release their financial security tied up in a property when the reality is that equity release can be an alternative solution.
The research highlighted that many over 50s are effectively sitting on thousands of pounds of wasted space and – with the aid of equity release – could be used to ease people’s financial situation, enhance retirement or enable them to explore various other opportunities in later life, Gregory said.
The study also revealed that third of over 50s intend to assist their children financially in their later years.
While a fifth plan to give some of their wealth to their grandchildren, 38 per cent desired to visit luxurious locations and spending their money on holidays to utilise their retirement. However, despite their willingness to spend their savings in later life, nearly half were worried about their financial future.
Although the average over 50 has £18,113 in their bank account, a third of respondents have less than £7,500 in savings.
The study, conducted via OnePoll, also revealed one in 10 are considering dipping into their pension pot early to support their lifestyle, while 15 per cent are debating selling some of their belongings.
A fifth of those still working, are thinking of retiring later than planned as they believe it will be eight years before they are able to enjoy a leisurely life.
Just 12 percent are considering taking out equity in their property to stabilise their financial future, compared to a third who have contemplated downsizing.
And they believe it will be just five years before doing any one of these things in a bid to prevent them from living on the breadline.
Gregory said many people don’t understand the features and benefits of equity release as a possible solution to support retirement. Therefore, taking equity out on their home is not always the first port of call, and they end up opting for alternatives that may not be the best option to suit their circumstances.
He said that whilst it’s not the only option to raise capital for an enhanced retirement, equity release could be beneficial and should always be considered with the right financial advice.
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