Almost one in five Londoners are planning to downsize their home to help fund their retirement, according to a new study, as the cost-of-living vacuum shakes down savings.
Homeowners in London lead the way in the plan to swap their family home for a smaller property and stow away the windfall cash for the future, in comparison with the rest of the country, financial services giant Hargreaves Lansdown has revealed today.
Just one in ten in Scotland, the equivalent of 11 per cent of people, have tabled the same plan, with property prices in the capital dwarfing that of the rest of the UK.
The survey of 1500 people, conducted by market researcher Opinium on behalf of Hargreaves Lansdown, found that while the move may boost retirement funds – many are too sentimental about their family homes to let them go.
“Downsizing can seem the ideal way to plug retirement income gaps but the reality of actually doing it is much harder than first thought,” explained Helen Morrissey, senior pensions and retirement analyst at Hargreaves Lansdown.
“Moving to a smaller property can look like a sensible choice, the children have left home and you have spare room, but the emotional pull of leaving the home you’ve raised a family in can prove too much.”
Morrissey added that, while Londoners may have benefitted from a massive surge in house prices, legal fees and stamp duty costs may put a “huge dent” in profits.
“Unless you are moving from a house to a flat then you could struggle,” she said. “Even those living in London with its sky-high property prices may find they need to move a considerable distance to get their home and their retirement income sorted.”