|
Downsizing a risky way to fund retirement plans
7 March 2008 12:00
Britons hoping to fund their retirement aspirations just through moving to a smaller house could be badly deluding themselves, according to a new report.
Most people hope for a retirement income equivalent to two thirds of what they earned while working, Standard Life's study showed, yet downsizing from a detached house to a bungalow would only bring in £100 a week on average, just 30 per cent of their target.
Moving from a detached to a semi-detached or even to a flat still generates on average less than two fifths of an acceptable retirement income, while exchanging a semi-detached for a flat would bring in only 2.1 per cent of the money needed.
Yet there are locations where downsize makes sense, with retirees in the south-east able to typically produce 71.2 per cent of their income by moving from a detached to a flat, while for Londoners this would provide around 63.9 per cent of their required funds.
Nonetheless, Standard Life's senior pensions technical manager Andrew Tully warned that while many people are still hoping to rely on a strong property market for a dream retirement, this could prove disastrous unless they make substantial provisions elsewhere.
|
