Nearly a third of people aged over 55 feel their home is too big, too small, or won’t be the right size for them as they age, research from Paragon Bank has revealed.
Paragon Bank’s new report, ‘The Rightsizing Challenge’, found that 11% of over 55s felt their property was too big, with 5% claiming that it was too small. A further 14% said that whilst they felt their property was the right size for them now, they planned to move to a smaller property in the future.
The survey of over 2,000 homeowners in this category found that 33% would like to move to a more suitable-sized property in the future. Of those, 61% said a lack of suitable properties was the main thing stopping them.
Whilst many retirees complain they are asset rich but cash poor, the research discovered that many people lived in a property that appeared to be bigger than necessary. 53% of solo dwellers had three or more bedrooms, while 29% of two-person households had four bedrooms or more.
Of those who felt their property was too big, 71% planned to move in the next five years, with a bungalow (62%), detached home (36%) and flat (29%) the preferred property types.
Those aged over 75 (82%) were most likely to plan to downsize. 86% of those who lived in London and thought their home was too big planned to move within five years. Those in Wales were more likely to stay put, with only 44% of those who thought their home was too big looking to move in the next five years.
Seven in 10 people said they wanted to move to a property with either one or two bedrooms, whilst 10% said they would consider moving to an assisted living style property.
91% of those planning to move to a smaller home intended to own their next home outright, with 4% saying they would buy with a mortgage. A further 5% said they intended to rent.
Our research found that if a house move in the next five years resulted in a financial windfall, 52% of movers would hold the money as cash, while 28% would invest it.
28% would gift cash to family, with home-movers in the East Midlands most likely to do this (52%).
Those aged over 75 would be more likely to gift money to family, with 51% of this age group saying they would do this, compared to 28% of people of all age groups. Meanwhile, a quarter of people (26%) would also look to splash out on a big ticket item, such as a holiday or car, whilst a fifth said they would look to use the money to upgrade their new home.
Derek Sprawling, Paragon Bank’s savings director, said: “Many people in retirement age, or nearing retirement age, feel their home isn’t the right size for them. Whether it’s a family home where the children have left or a just a well-loved property that simply isn’t right for their ongoing needs, it’s a dilemma facing many homeowners.
“Moving home is not a simple decision, with many memories and feelings associated with the family home. But it can make sense for a lot of people who either live in a home too big for their need, or who are asset rich but cash poor.
“Many people over the age of 55 who choose to rightsize will end up with a cash windfall. With half of people choosing to keep that finance in a cash savings account, it’s important they find the right account offering the best returns.
“Rightsizers should consider how they intend to use their cash windfall. For example, do they need all of it now or would they be happy to lock some away for a couple of years and retain a smaller amount for everyday living. Consider a portfolio of different savings accounts to ensure you are maximising the returns for your circumstances.”
