Millions are choosing lower living standards in retirement rather than selling their homes, new research shows
Millions of Britons are heading towards poverty in their later years despite sitting on property worth hundreds of thousands of pounds.
Nearly half of older homeowners lack sufficient income for even a modest retirement, yet remain trapped in homes they cannot afford to leave.
Some 3.7 million property owners between 55 and 79 years old do not possess adequate funds to achieve a "moderate" standard of living once they stop working, new analysis reveals.
This represents 46 per cent of homeowners in that age bracket who face relative hardship despite owning substantial bricks-and-mortar assets, according to research by Fairer Finance.
Among those facing this retirement shortfall, approximately 1.8 million individuals own homes valued between £200,000 and £400,000, while a further 650,000 possess property exceeding £400,000 in value.
The findings indicate that many pensioners prefer accepting reduced living standards rather than selling their homes to unlock capital.
Elevated stamp duty charges and a shortage of suitable retirement accommodation have been identified by experts as key barriers preventing older homeowners from moving to smaller properties.
Women living alone face the greatest hardship, with eight per cent of female homeowners aged 55 to 79 earning below £13,400 annually — barely above the state pension of roughly £12,500.
Dennis Reed, of Silver Voices, a membership organisation representing those over 60, said many pensioners occupied costly, "unsuitable" homes while facing limited alternatives.
"Many of our members live in relative poverty in family homes which are expensive to run, but the only options available to them are often apartments in retirement complexes which have exorbitant service charges and are then difficult to sell on," he said.
"We have long argued for stamp duty to be abolished for last-time buyers."
He added that the state pension fell "way below the level required for a dignified standard of living," leaving millions struggling to heat their homes and maintain healthy diets.
Mike Ambery, of pensions firm Standard Life, said: "For many people today, a growing share of their wealth is tied up in their home rather than in a pension.
"Property can certainly play a useful supporting role in retirement planning, but it isn't a complete solution on its own, and leaning on it too heavily can leave people a bit exposed."
Tim Hogg, of Fairer Finance, said: "Our research shows that huge numbers of people heading for a retirement income shortfall are sitting on significant housing wealth which could bridge the gap if they want it to.
"The picture is particularly stark for single women, who face the highest risk of low living standards in retirement, despite often owning homes worth hundreds of thousands of pounds."
Caroline Abrahams, of charity Age UK, said: "The Pensions Commission, set up by the Government, has also found that millions are set to miss what experts say is the minimum retirement living standard.
"At best, it means not being able to afford the extras that bring joy to you, like being able to pay for holidays and nice meals out, and at worst it can leave you scrimping to get by."
The Pension Commission cautioned last month that 15 million people were failing to save adequately into their pensions and risked encountering a "severe cliff-edge" upon retirement.
