• £23bn can be unlocked to tackle UK’s regional retirement divide
• Unlocking housing wealth could help to fund more than a decade in retirement in lower-income regions
• Pensioners in the North West are falling furthest below, needing £15,320 more per year to reach a moderate income (£31,700)
• Over-60s could release up to £23bn a year by 2040, but policy reform is needed to make this a reality

More than half of households (51%) aged 60+ could fund a better, longer, retirement by accessing their housing wealth, according to an independent report from Fairer Finance, commissioned by the Equity Release Council.

The report finds accessing housing wealth could unlock £23bn annually in additional spending power by 2040 and help to bridge the growing regional divide in later-life financial readiness.

This is even more pertinent in regions such as the North East who have the lowest average annual pension income, equivalent to £16,380, some £15,320 away from the recommended £31,700* ‘moderate’ retirement standard set by Pensions UK.

Yet, based on later life lending market data, the median house price in the region is £261,692, among customers in H1 2025. If homeowners were to release 40% equity in a property of this value they could top up their retirement income to the moderate amount for six years, or could fully fund 3.3 additional moderate years in retirement.

Similarly in the West Midlands, where the average annual pension income for a single person is £16,440, which is £15,620 shy of the amount needed annually for a moderate retirement, property owners could unlock £98,800 and top up their retirement income for 6.3  years or fully fund an additional 3.1 years to a moderate level.

At the other end of the scale in London where average equity release property prices currently sit at £561,000 on average, but annual pension income sits at £17,160, bricks and mortar is a substantial asset. Taking out 40% equity in a property of this value is equivalent to £224,400, helping retirees to bring their retirement income to a moderate standard for 15.4 years, or wholly sustain an additional 7 years in retirement to a moderate standard.

(Assumes 40% equity released, in line with current market levels among later life lending sector where consumers typically can release up to 40% LTV. For illustrative purposes, excludes fees/interest)

To unlock the full potential of housing wealth in later life, the report ‘How can housing wealth bridge the later life funding gap’ outlines five key reforms:

1. Government should facilitate a substantial increase in the supply of suitable and desirable retirement properties, located in the communities where people in later life wish to live. This should also include a better framework for consumer protection, including looking at innovative tenure models that promote the use of housing wealth to improve affordability and health outcomes.
2. Government should lower the financial cost of downsizing by reducing stamp duty for people in later life. By facilitating more downsizing and freeing up family homes, the government can recoup some of the lost tax revenues through an increase in upsizing stimulated by greater supply of larger housing stock.
3. Government and regulators should normalise the use of housing wealth to maintain living standards in later life. MoneyHelper and Pension Wise should embed housing wealth as a central part of later life advice and guidance. Government and public agencies should invest in public information campaigns to break down the stigma and normalise the use of housing wealth in retirement.
4. Government and regulators should develop a personalised service for people, which brings their pension and housing wealth into a single view. Once pension dashboards are completed, the government should look to build in housing wealth to give consumers a clear view of their financial position and options as they enter later life.
5. The FCA should reform the regulation around later life advice, to break down silos and ensure all consumers are supported to maximise the use of all their assets as they approach retirement.

Jim Boyd, CEO of the Equity Release Council, comments: “The UK’s retirement landscape is changing fast. 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 £23bn 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. We now need to break down the barriers to using housing wealth confidently and safely, from outdated perceptions to fragmented advice.

“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.”

James Daley, managing director of Fairer Finance, said: “The relaunch of the Pensions Commission shows that this Government understands the severity of the impending later life crisis. While the Commission will hopefully unlock new ways to get people saving more for retirement, its’ actions will come too late for those who are already approaching later life without adequate provision.

“For many in this generation, using their housing wealth will be a vital lifeline to support a decent standard of living in later life. 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. Our report makes a range of pragmatic policy suggestions to ensure more people can use their housing wealth in retirement – and we urge Ministers to act on these as soon as possible.”

ENDS

Notes to Editors

Pension income: DWP Pensioners’ Incomes Series, means 2021/22 to 2023/24. Calculated based on weekly net pension income, and assumes 52 weeks per year of pension income.

House prices: ONS UK House Price index , UK: June 2025, published on 20^th August 2025.

Pensions UK 2024/25 Retirement Living Standards update – The report uses Pensions and Lifetime Savings Association’s (PLSA), now known as Pensions UK, Retirement Living Standards data as a benchmark for assessing income adequacy in later life. Specifically, it references the moderate retirement income level for a one-person household, which has been updated to £31,700 per year in the 2024/2025 release. Minimum Standard, – £13,400, Moderate Standard – £31,700, Comfortable Standard – £43,900, The figures published in Pensions UK’s 2024/25 Retirement Living Standards update (Published 03 June 2025) were correct as of 4 August 2025 when accessed for the purposes of this analysis.

Fairer Finance’s report – How can housing wealth bridge the later life funding gap?: Fairer Finance has modelled the way in which housing wealth can be used to increase living standards in later life. However, this is not a forecast. Rather, it estimated the size of the opportunity if policymakers, regulators, and industry can overcome the barriers that stand in the way of people accessing the value of their home through lifetime mortgages.

About the product: Equity release allows older people to access the wealth in their homes, without necessarily having to sell or move. Lifetime mortgages make up more than 99% of the market. They enable people to borrow against their homes without making repayments unless they choose to. The loan and interest, or part thereof, is paid when the customer dies or goes into long term care. Since 1991, more than 675,000 homeowners have accessed £50bn of property wealth via Council members to support their finances.

About the Council: The Council is the representative trade body for the UK equity release market. Plans that meet the Council’s standards come with six product safeguards: no negative equity guarantee; fixed or capped rates for life; the right to port; the right to make overpayments; secure tenure for life and the waiver of early repayment charges for if a borrower moves permanently into long term care. These safeguards are underpinned by mandatory independent legal advice which ensures the customer understands the risks and implications of the plan.

More information: Visit www.equityreleasecouncil.com; email [email protected] or [email protected]