Downsize your property and save for your retirement
When you retire, are you planning to stay in your current family home or will you be looking to move to somewhere smaller and free up some extra cash for your golden years?
If you’re planning to downsize, you’re not alone. According to a new report, a third of homeowners aged over 55 have thought about moving to a smaller house in the last few years. That’s the equivalent of 3.3 million people.
However, it seems that not all of them make the move, as just 7% of over 55s have actually managed to downsize, leaving the rest stuck in properties larger than they actually need.
Why aren’t people moving?
It seems that the main reason that older homeowners aren’t able to make the move to smaller properties is due to a lack of appropriate housing. Affordable housing is something of an issue at the moment for the rest of the population, with a shortage of properties meaning many families are struggling to get on the property ladder. With new policies set to encourage the building of starter homes, we might see this starting to improve soon on this front, but what about for retirees?
An estimated 2% of the UK’s houses are designed for pensioners, which isn’t many at all when you think about it. According to the study, if the 3.3 million over 55s were able to move to smaller homes, it would free up 18% of Britain’s housing market for families, worth £820bn.
If you’ve finished paying off your mortgage, you might be wondering why anyone would want to go through the hassle of moving again. However, downsizing can actually be a pretty good option, as it could give you an extra pot of money to help you through your retirement. If you’re buying a property that’s smaller, and therefore likely cheaper than where you live now, you’ll be able to put the extra cash towards when you stop working, once you’ve covered all of the moving fees.
It also means that you’ll have less trouble if you need to move for health reasons when you’re older. While you might be completely healthy now, it could be a very different story in 10 or 15 years and you might not feel up to going through a house move then.
Making the move
To make the move to a smaller property, look at what’s important to you. Do you want to live nearer your kids and grandkids, or a few minutes away from the local shops? If you’re a bit more flexible about where you want to live, you might find it a bit easier to find a suitable property.
You’ll also have to ‘downsize’ your furniture and get rid of stuff you don’t need, as you won’t be able to fit everything into the new house if it is much smaller. If you’ve got an emotional attachment to something, see if family members will take it, or donate it to your local charity shop so someone else can get good use out of it.
Be strict with yourself though and make sure you’ll only take enough furniture to fit into your new place. If you’re going to have to order any new furniture, make sure you order it in plenty of time. You don’t want to turn up at your new house only to realise you won’t have a sofa for six weeks!
Lastly, see if your friends and family can help you make the move. If you’ve got kids, it’s likely they’ll have moved house more recently than you so they might be a bit more up-to-date with everything that needs to be done on the day. If you’re not sure what you’ll need to do to move house, check out our moving guide.
Disclaimer: All information and links are correct at the time of publishing.