'Too many Britons' relying on property equity

The significant house prices rises seen in the UK property market over the past 15 years have led some Britons to assume that they can rely on equity release for retirement income, it has been suggested.

Many people now have a "vague notion" that prices will continue to rise, thus enabling them to offset any potential problems with their pensions by using the equity in their home, according to the Pensions Advisory Service (PAS).

But with prices now showing signs of falling slightly around the UK, the organisation has said that such ideas could be "misconceived".

"[Householders] build up an expectation that house prices will continue to increase, which I think is maybe a misconceived idea," noted Des Hamilton, technical director at the PAS.

"It's maybe not as easy as they think to release equity: it may involve substantial downsizing… [And many] may find that the true value of their property never really produces that equity that they looked forward to.

"But I think it is at the back of a lot of people's minds: 'If I get into property, that in itself will take care of at least part of my needs in retirement," Mr Hamilton concluded.

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