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Some 41% of home owners in the UK over the age of 55 plan to sell their current property and many will downsize, according to new data. This is up from 38% six months ago according to the figures from the bi-annual Prudential Downsizing Index. The data shows that 75% of home owners over the age of 55 who are planning to sell, say they will downsize. The average amount of capital they hope to free-up as a result of these property sales is £87,600, up from £85,300 in May of this year. Of those expecting to release equity from downsizing, 45% will spend newly released cash on big ticket or luxury purchases like holidays, 48% say they will save or invest the money, while 40% will use the funds to boost their pension pots. Some 61% say having too much space is the main reason for downsizing, 58% want the convenience of running a smaller home, while 34% want to access the equity in their home. The data also shows that 22% plan to reduce the day to day costs of running a large home while 21% are prompted by changes in personal circumstances, including divorce or separation. The index suggests that many are looking for a change, with 35% of those who are planning to sell saying they will relocate to another town or city within the UK. ‘Our homes are often our most valuable assets, but also one of our greatest expenses. The financial benefits of downsizing, from both a cost-saving and releasing capital perspective, can be very enticing. But those who are considering it should exercise caution and be careful not to overestimate the level of funds they expect to receive,’ said Vince Smith-Hughes, retirement income expert at Prudential. ‘Freeing up cash as a result of selling your property may be appropriate for some, but it should never be seen as a substitute for saving for retirement. The best way to secure your desired standard of living in retirement is to save as much as possible from as early as possible and to seek professional financial advice on the best retirement income options available for your needs,’ he added. Separate analysis of data from The Census reveals that Cornwall, Arun and North Somerset are the most popular destinations for retirees to move to in England and Wales, for those aged 65 and over. Continue reading →
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