Advisers key to supporting informed decisions on using home equity in retirement
More than half (51%) of UK households aged 60 and above have the potential to improve their retirement prospects by accessing their housing wealth, according to a study commissioned by the Equity Release Council.
The research estimates that releasing housing equity could generate an additional £23 billion in annual spending by 2040, offering a possible solution to the widening gap in later life financial security between different regions.
The findings highlight particular challenges in areas such as the North East, where the average yearly pension income stands at £16,380—significantly below the £31,700 moderate retirement benchmark set by Pensions UK. With a median house price of £261,692 among later life lending customers in the first half of 2025, homeowners in the region could, by releasing 40% of their property’s value, supplement their income to the moderate standard for six years, or fully fund an additional 3.3 years at that level.
A similar pattern is observed in the West Midlands, where the average single pension income is £16,440—£15,620 short of the moderate retirement threshold. Property owners could unlock £98,800 by releasing 40% equity, enough to top up their retirement income for 6.3 years or fully cover an extra 3.1 years at the moderate standard.
In London, where the average property price is £561,000 and annual pension income is £17,160, the potential for using housing wealth is even greater. Releasing 40% equity would provide £224,400, enabling retirees to reach the moderate retirement standard for 15.4 years, or to fully fund an additional seven years at that level.
“The UK’s retirement landscape is changing fast,” said Jim Boyd (pictured right), chief executive of the Equity Release Council. “Many people have more property wealth than housing 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.
“The estimate that people may unlock £23 billion a year by 2040 highlights how transformative the use of property wealth could be for our rapidly ageing population and for the wider economy by increasing older people’s spending power.”
For advisers, these findings highlight a growing need to discuss later life lending and equity release options with older clients. Advisers should be prepared to guide clients on how property wealth can supplement retirement income, address regulatory changes, and help clients make informed decisions about using housing equity as part of their overall financial planning.
“We now need to break down the barriers to using housing wealth confidently and safely, from outdated perceptions to fragmented advice,” Boyd said. “This isn’t about pushing people in one direction. It’s about giving everyone access to trusted guidance and flexible options, so they can make informed choices that work for their circumstances, wherever they live.”
For James Daley, managing director of Fairer Finance, the relaunch of the Pensions Commission shows that the government understands the severity of the impending later life crisis.
“For many in this generation, using their housing wealth will be a vital lifeline to support a decent standard of living in later life,” Daley said. “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.”
Want to be regularly updated with mortgage news and features? Get exclusive interviews, breaking news, and industry events in your inbox – subscribe to our FREE daily newsletter. You can also follow us on Facebook, X (formerly Twitter), and LinkedIn.
