A well-known financial services company is today urging government to scrap stamp duty for pensioners who are looking to downsize to help further fund their retirement.
Research by LV has discovered that retirees are increasingly looking towards bricks and mortar as a way to finance their golden years, but many are unable to unlock the money they need from their property by downsizing as they cannot afford the associated costs of moving.
LV's survey discovered that roughly a third (34 per cent) of those approaching retirement age are planning to use their home to provide them with extra cash during their later years, compared with under a quarter (22 per cent) of current retirees who are doing the same.
LV also found that more than three-quarters (77 per cent) of pensioners are either living alone or as a couple, but around two-thirds (64 per cent) were residing in a house with at least three bedrooms, suggesting that there's quite a lot of accommodation space going to waste.
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However, those who think their retirement is safe in houses might be shocked to discover that moving now typically triggers a stamp duty bill of around £4,600.
"More and more of us are relying on our home to help fund our retirement, yet retirees face significant costs if they choose to downsize," said John Perks, managing director of LV Retirement Solutions. "We're calling for government to scrap the unfairly high stamp duty costs for downsizing pensioners and provide a much-needed injection of larger homes into the market for the millions of families struggling to move up the ladder."
LV is arguing that slashing stamp duty for those who want to switch their property for something smaller would not only help more people to stay solvent during their retirement, it would also help many younger people onto the housing ladder by freeing up family homes that are no longer needed by their current owners.
Before government worries whether it has enough pennies in the coffers to fund such a reform, Perks added: "By increasing the number of property sales, this could also increase Government’s stamp duty revenues in the long run, making it a win-win for everyone."