The average person over 50 in Britain is sitting on the equivalent of £56,574 worth of extra space in their home which is not being used, according to new research.
The study of 2,000 UK adults over 50, found the typical house size to be 165.6 square metres and with the average house price coming in at £276,393, each square metre equates to the value of £1,669.
As a result of having this vast space with typically two unoccupied rooms, two fifths said their house feels emptier now that their grown-up children have moved on, the report from Equity Release Supermarket says.
But after two years and seven months of their property going untouched, many seize the opportunity and transform this space into a personal gym, office or even the craft room they’ve always dreamed of.
‘Our survey found there is plenty of space in the family homes of empty nesters which is going to waste, and it’s not just space but possible financial wastage,’ said Mark Gregory, chief executive officer of Equity Release Supermarket.
‘There tends to be fond memories and a certain amount of nostalgia linked to a property, so it’s difficult for people to say goodbye to a family home. One option for empty nesters to raise equity is to simply sell the family home and downsize,’ he pointed out.
‘However, with a reluctance to say goodbye to all those memories, many, incorrectly believe that downsizing is the only way to release their financial security tied up in a property, when the reality is that equity release can be an alternative solution,’ he explained.
‘The research highlighted that many over 50s are effectively sitting on thousands of pounds of wasted space and with the aid of equity release could be used to ease people’s financial situation, enhance retirement or enable them to explore various other opportunities in later life,’ he added.
The study also revealed a third of over 50s are planning to give money to their offspring in their later years. A fifth plan on bestowing some of their wealth on their grandchildren, while 38% dream of luxurious locations and spending their money on holidays to make the most of their retirement.
However, despite a willingness to spend their stockpile in later life, half of those surveyed said they are worried about their financial future.
Despite the average over 50 having £18,113 sitting in their bank account, a third of respondents have less than £7,500 in savings leaving them with a smaller safety net beyond their pension or other assets.
The study also revealed that, one in 10 are considering dipping into their pension pot early to support their lifestyle, while 15% are debating selling some of their belongings.
Of those who are yet to retire, respondents reckon it will be eight years before they’re able to enjoy a leisurely life and so a fifth are thinking of retiring later than planned. Just 12% are considering taking out equity in their property to stabilise their financial future, compared to a third who have contemplated downsizing. And they believe it will be just five years before doing any one of these things in a bid to prevent them from living on the breadline.
‘Many people don’t understand the features and benefits of equity release as a possible solution to support retirement. Therefore, taking equity out on their home is not always the first port of call, and they end up opting for alternatives that may not be the best option to suit their circumstances,’ Gregory said.
‘Whilst it’s not the only option to raise capital for an enhanced retirement, equity release could be beneficial and should always be considered with the right financial advice,’ he added.