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If you’re planning to retire in the next few years, but are finding your sums simply aren’t adding up, tapping into your housing wealth may be one option worth considering – although it is not without risks.
The income we can expect from our pensions often falls well short of what’s needed to achieve a “moderate” standard of living in retirement, and where you live in the UK can make that shortfall even wider.
Six in ten pension savers expect to fall short of a moderately comfortable retirement, last year’s Great British Retirement Survey from interactive investor found, expecting total retirement pension wealth of less than £300,000 when they retire. Women currently have much lower financial expectations for retirement, expecting £150,000 pension wealth on average by the time they stop work, compared to £250,000 for men.
New research suggests that tapping into housing wealth through equity release could play a much bigger role in helping older homeowners boost their retirement income, especially in areas of the UK where pension incomes are lowest. According to an independent report by Fairer Finance, commissioned by the Equity Release Council, more than half (51%) of households aged 60 and above could improve their retirement by accessing some of the wealth tied up in their home.
Here, we look at how equity release could help you do this, and explain why it won’t be the right solution for everyone.
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Are you considering releasing equity from your home? Speaking to an experienced adviser can help you to understand your options.
If you think you’d benefit from expert advice, you can book a free consultation with an adviser at HUB Financial Solutions. A qualified, FCA-regulated equity release adviser you can trust will listen to your needs and talk you through your options. HUB Financial Solutions is rated ‘Excellent’ on Trustpilot.
Please note that equity release will reduce the value of your estate. So if it’s not right for you, the adviser will help you understand some alternatives.
How housing wealth varies depending on where you live
The amount of housing equity homeowners typically have varies widely depending on where they live, as property prices tend to be much higher in the south of the UK compared to northern regions. However, wherever you live, average pension income after housing costs falls far short of the £31,700 a year that the Pension Lifetime and Savings Association (PLSA) estimates we need to achieve a moderate standard of living in retirement. You can find out more about this in our guide How much do you need to retire comfortably in 2026?
According to the Fairer Finance Report, accessing housing wealth could unlock £23 billion annually in additional spending power by 2040, and fund between two and seven additional years of moderate retirement income.
Its estimates show that this could be particularly helpful for those in areas with the lowest average annual pension incomes. For example, those living in the North East have a typical annual pension income of £16,380 in retirement, which is £15,320 less than the recommended PLSA’s ‘moderate’ retirement standard.
The average property price in the North East among later life lending customers is £164,000, so if homeowners were to release 40% equity in a property of this value, they could top up their retirement income to the moderate amount for just over four years. Alternatively, they could fully fund two additional moderate years in retirement.
Jim Boyd, chief executive of the Equity Release Council, comments: “The UK’s retirement landscape is changing fast. Many people have more property wealth than pension wealth, and property will form an increasingly important asset to fund longer lives in retirement. Yet, too few people know it’s an option or feel confident exploring it.
“Our findings shine a light on the potential for housing wealth to provide better retirements for people across the UK, especially in regions like Yorkshire and the Humber and the North West, where pension incomes are lower but property wealth remains strong. Millions of older homeowners are asset-rich but income-poor, and are often unaware that their home could be the key to a more secure retirement.”
Releasing equity can have an even more significant impact in London, where pension incomes are still modest (£17,160 a year on average), but property wealth is far higher. With average equity release property values around £561,000, accessing 40% equity (£224,400) could support a moderate retirement income for over 15 years, or fully fund seven additional years of retirement. Find out more about how equity release works in our guide Equity release – what is it and how does it work?
The table below shows how long homeowners in different regions could top up their retirement income to the moderate amount or fully fund years in retirement if they were to release 40% equity from their homes. These examples assume median house prices based on later-life lending market data from customers in the first half of 2025.
Region | Equivalent of 40% equity | Shortfall between avg. income and moderate retirement (£31,700) | Number of years equity release could top up current retirement income to moderate retirement income | Full additional years funded to a moderate level of retirement income |
London | £224,400 | £14,540 | 15.4 | 7 |
South East | £153,200 | £12,460 | 12.3 | 4.8 |
East of England | £135,200 | £13,812 | 9.8 | 4.3 |
South West | £120,800 | £12,668 | 9.5 | 3.8 |
East Midlands | £95,600 | £14,172 | 6.7 | 3 |
West Midlands | £98,800 | £15,620 | 6.3 | 3.1 |
North West | £84,800 | £14,800 | 5.7 | 2.7 |
Yorkshire & Humber | £81,600 | £14,748 | 5.5 | 2.6 |
Scotland | £76,800 | £13,864 | 5.5 | 2.4 |
North East | £65,600 | £15,320 | 4.3 | 2 |
Source: Fairer Finance/ Equity Release Council
What would make it easier to use housing wealth in retirement?
The report stresses that realising the potential of property wealth to help fund retirement would require changes to policy, regulation and public understanding.
James Daley, managing director of Fairer Finance, said: “For many in this generation, using their housing wealth will be a vital lifeline to support a decent standard of living in later life. But there’s still work to be done to ensure people can access their housing wealth. It’s crucial that the Government does not lose sight of the problem facing the next generation of retirees, while it looks for a solution for future generations.”
The report sets out five key reforms to make better use of housing wealth in later life, including:
- More suitable retirement housing, built where people actually want to live
- Lower stamp duty costs for older movers, to make downsizing more affordable
- Normalising housing wealth in retirement guidance, with services like Pension Wise and MoneyHelper integrating it into advice
- A single, personalised view of pensions and housing wealth, so people can see all their assets together
- Reform of later life advice regulation, to ensure consumers get joined-up, holistic guidance
The good news is that there are already several protections in place to support equity release customers.You can find out more about these in our guide Is equity release safe?
A final thought…
If you’re considering equity release, it’s vital you’re comfortable accepting the downsides and the impact it could have on your broader financial situation.
Unlocking some of your property wealth will reduce the value of your estate, leaving you less to pass on to loved ones when you die, and it could affect your entitlement to means-tested benefits. It may also affect your future plans if you want to move in a few years’ time.
However, if you are facing a significant retirement income shortfall, and don’t have any other savings you can fall back on, provided it is used wisely, it might be one way to boost your income once you stop working.
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Are you considering releasing equity from your home? Speaking to an experienced adviser can help you to understand your options.
If you think you’d benefit from expert advice, you can book a free consultation with an adviser at HUB Financial Solutions. A qualified, FCA-regulated equity release adviser you can trust will listen to your needs and talk you through your options. HUB Financial Solutions is rated ‘Excellent’ on Trustpilot.
Please note that equity release will reduce the value of your estate. So if it’s not right for you, the adviser will help you understand some alternatives.
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