House prices in England have grown at twice the rate of pensioner households’ disposable incomes over the past 20 years, according to new research from the Equity Release Council.
The rate of house price growth outweighs the gains pensioners have seen from other staples of retirement income such as the state pension, investments, occupational pensions and other earnings.
ERC analysis of the latest data from the Office for National Statistics shows pensioners’ household incomes increased by 66 per cent in real terms between over the last 20 years, from £12,664 to £21,026 a year.
Over the same period, inflation-adjusted house prices in England increased by 148 per cent from £82,100 to £203,360.
This figure is now nearly ten times the size of a typical pensioner’s household income (9.7), up from 6.5 times pensioner income.
ERC chairman Nigel Waterson says: “While the growth in house prices has not been linear or universal, strong market fundamentals mean housing equity is likely to remain a sizeable asset for the foreseeable future.
“It means housing wealth has an indispensable part to play in all discussions homeowners have about financial wellbeing in retirement.
“Government must act to encourage people to think through their options holistically, rather than focusing exclusively on savings and overlooking other choices that could boost their prospective retirement income.”