Property is Not Pension

Property is Not Pension

Property will not be your pension in retirement according to Standard Life.

Standard Life has issued a stark warning to homeowners planning to fund their retirement by downsizing their property.  Analysis of the UK housing and retirement markets, has revealed that the downsizing of the average home in the UK would provide only 16 per cent of people’s retirement income.  

The findings also suggested that downsizing and achieving a surplus £150,000 of equity could provide an income of around £130 per week, while moving from a bungalow to a flat in the UK would release £25,000 of equity, sufficient to deliver a weekly income of £22.

Our view

The strong housing market as ever moves in cycles and we are in a downward turn of the market.  This means that those planning to downsize property will suffer.  In addition, those who own second property will face capital gains tax on their property profits of 18% if they sell and 20% from the rental income.  

The only way to plan for retirement is to take professional advice.

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