Retirement: The unexpected reason millions plan to downsize



The concept of downsizing has been around for years.

In fact, research shows that many of us are over-reliant on rising house prices to help fund our retirement. However, a new report from Prudential shows that releasing capital isn’t the main motivation for most downsizers.

The key figures from the research are:

  • 3.9 million: the number of over-55s who to downsize to a smaller home in later life
  • 47%: The percentage of over-55s who plan to downsize
  • £112,000: The average amount of equity that homeowners will release

The main reason for downsizing, is usually thought to be a need to release capital to help fund retirement. That’s certainly true for some people; the research found that 13% of people couldn’t afford to retire without releasing equity from their home. However, Prudential’s figures reveal that the main reasons for downsizing were:

  1. Convenience of running a smaller home (74%)
  2. Having a smaller garden (34%)
  3. Release cash for retirement (28%)

Despite the main motivation being a desire to move to a smaller, more manageable property, the majority of people (60%) will use the equity the release to help fund retirement, other popular uses for the money include:

  • More travelling (47%)
  • Gifts to their children (14%)
  • Helping children on to the housing ladder (13%)

Downsizing difficulties

However, despite the desire to move to a smaller property, downsizing isn’t as simple as it sounds.

The research revealed significant practical difficulties and concerns amongst the nation’s potential downsizers:

  • 38% of people are concerned about the lack of alternative, smaller, homes
  • 24% were worried about the cost of moving (stamp duty, estate agent’s fees, legal costs etc)
  • 17% are put off by high house prices

These of course come on top of the emotional attachment many people will naturally have to their home. It’s where many of us married, raised families, even saw our loved one dies. Those times create an emotional attachment, which is often tough, if not impossible to break.

Regional differences

The research threw up some interesting, and surprising, regional differences.

Over the past few years, London has seen the largest rise in house prices. However, it is homeowners in the capital who are least likely to downsize; just 41% said they would consider moving to a smaller property. Other regions are far more likely to downsize:

  • Northern Ireland (63%)
  • East of England (60%)
  • Scotland (45%)
  • West Midlands (45%)

We’re here to help

In our experience, the people who enjoy the most financially secure retirement are those who plan carefully.

That’s where we come in.

Our independence, experience, knowledge and access to cutting edge financial forecasting software allows us to put a plan together for our clients to help them achieve their retirement goals.

That, of course, may, or may not, include downsizing.

If you would like to discuss your retirement planning we would love to hear from you. Call Bev or Sarah on 0115 933 8433 or email