New research from Royal London shows that those of working age who are planning to downsize to fund their retirement could see their annual income drop by half.
1,500 people were surveyed, looking to downsize from an average property value of £310,000 (detached) to £197,000 (semi-detached). By using the proceeds of the sale to purchase an annuity, this would make an annual income of £13,700 including state pension. Given that the average annual wage for a full time UK worker is £27,400, there would be a sizable slump in standard of living.
According to Baring Asset Management, up to 3 million people are planning to use this approach to fund their retirement. There are also barriers to downsizing which homeowners should consider, such as a low supply of housing to move into, and also older children who are not ready to move out yet.
https://warrenifa.co.uk/wp-content/uploads/2014/06/WARREN-CO-TRANSPARENT-BCKGROUND-2-300x184.png00kittyhttps://warrenifa.co.uk/wp-content/uploads/2014/06/WARREN-CO-TRANSPARENT-BCKGROUND-2-300x184.pngkitty2016-07-25 11:22:042016-07-25 11:22:04The Dangers of Relying on your Home as a Retirement Nest Egg