Reports and Briefing Notes

Retirement income and assets: how can housing support retirement?

This is the second in a series of four research reports on retirement income and assets in the UK.  This report considers the role that housing wealth could play in supporting retirement for today’s pensioners and for future generations of pensioners. The report has been sponsored by Prudential UK & Europe. The retirement income and assets series has been sponsored by Age Concern & Help the Aged (Age UK), the Association of British Insurers, The Department for Work and Pensions, the Investment Management Association, JP Morgan Asset Management and Prudential. 

Recent pensions policy developments in the UK have mostly focused on the accumulation of assets to fund retirement income, for example, the introduction of auto-enrolment, compulsory employer contributions and personal accounts. There has been some research on the use of assets in retirement, however most of the research has examined particular assets in isolation. There is a need for a holistic consideration of the evolution of financial needs during the course of retirement and the roles that different sources of income and assets could have in meeting those needs, combined, as well as in isolation.

This report examines the various methods and attitudes to the use of housing assets to support retirement, the distribution of housing wealth and projects possible future use of housing wealth under a number of scenarios. It builds on the results from the first report: do pensioners have sufficient income to meet their needs?

Chapter one discusses how much wealth is held by UK households in housing assets compared to other assets. It considers how many people are using property to save for their retirement compared to saving for retirement in other ways or not at all. The distribution of housing wealth and how it correlates with other assets is also considered.

Chapter two considers how current pensioners use housing assets to support retirement. This includes the use of housing assets to reduce living costs, to access housing wealth, as a source of investment income, as insurance against adverse events or to pass on as a bequest.

Chapter three considers how housing could be used to support the retirement of some of the hypothetical individuals used in the first report.

Chapter four considers the extent to which housing assets could play a role in supporting retirement for future generations and what scope there is for growth in the use of housing wealth to support retirement.

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