SunLife has revealed that over 55s believe they need £114,436 for a “comfortable” retirement.
The firm asked more than 1,000 people in their 50s, 60s, 70s and 80s, how much money they think they would need – on top of any income they already have – to “feel comfortable for the rest of their lives.”
Overall, respondents thought they would need £114,436. Those aged 55-59 said they would need more – £180,741 on average, those in their 60s said £101,811 and those aged 70 and over thought a lump sum of £93,801 would be enough for a comfortable retirement.
SunLife’s research also revealed that on average, people aged 55 and over who own their own home have houses worth £290,659. Most have had their homes for more than 20 years, with the average home bought in 1994 – back then, the average home was worth £51,633 which means an increase in value of £239,026.
The vast majority – 82% – own their homes outright, while those who do have an outstanding mortgage only have £55,044 left to pay, which is less than a fifth of the total value. That means that all those surveyed have an average of at £282,623 of equity sitting in their homes, while eight in ten have the full £290,659.
Simon Stanney, equity release service director at SunLife, said: “This is a generation that are generally property rich and cash poor due to healthy increase in the value of their homes, but inflation eating away at pension pots and increased living costs.
“62% of those surveyed said they categorically did not want to downsize, which means the solution for the majority could be to unlock some of the value in their homes via equity release.
“Equity release lending has more than doubled in the past two years with someone releasing equity from their home every 20 minutes – a total of eight million pounds’ a day. So it is clear that equity release is fast becoming the preferred choice among people over 55 to fund the retirement they want.
“Our how much has my house made me calculator can show how much your home has gone up in value while our equity release calculator can show how much of that equity you could release.”