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If you're coming up to retirement, you've probably spent several decades paying off the mortgage on your home.
That's also several decades of payments that could have gone into your pension.
UK retirees aren't earning enough for a moderate standard of living in retirement, the Society of Pension Professionals (SPP) has warned, estimating a shortfall of £48bn.
Yet that same group of retirees hold £3,840bn in housing wealth, leading the SPP to call for pensions and housing wealth to be considered together when planning for retirement.
Here, we explain how you might use the equity in your property to supplement other savings.
A new report from the SPP entitled ‘Rethinking Retirement Wealth’ suggests that the UK can no longer treat housing and pensions as separate policy issues if it hopes to solve the growing retirement adequacy crisis.
The background is that retirees are often ‘asset‑rich, but income‑poor’, with many of today’s retirees requiring accumulated housing wealth to help compensate for shortcomings in pension provision.
Six key recommendations include merging housing wealth into mainstream later-life guidance services such as MoneyHelper and Pension Wise, alongside information on mortgages, equity release and pensions.
‘Housing wealth is not a substitute for adequate pension saving, but it is a significant asset for millions of homeowners'
The SPP also called for metrics such as the retirement living standards to include rental and mortgage costs in later life. Older people to be given tax relief on stamp duty when downsizing was another suggestion.
Equity Release Council (ERC) chief executive, Jim Boyd, commented on the report’s findings: ‘Housing wealth is not a substitute for adequate pension saving, but it is a significant asset for millions of homeowners and needs to be considered in unison with pensions, savings and investments when planning for retirement’.
As we’ve seen from the SPP figures, some people may end up with little in the way of pension savings but have considerable property wealth that they could use to supplement their income.
With property accounting for 40% of total household wealth in the UK, compared to 35% for pensions, tapping into this equity is likely to be increasingly important for people looking to strengthen their retirement finances.
You could downsize to a smaller property, though this involves incurring stamp duty and the costs of moving home.
One alternative is to consider equity release, which allows older homeowners to access some of the value in their home without having to move.
The latest figures from the ERC show that more people are borrowing an increasing level of funds from their properties.
Total lending increased to £597 million during the second quarter of 2026, which represents a 4% rise on the previous quarter (£574m). Overall customer numbers also rose by 4% over the same period to reach 13,489.
People borrowing a lump sum for the first time took out an average of £113,779 between April and June 2026.
Speak to the experts at HUB Financial Solutions, they'll be able to help
Go to HUB Financial SolutionsIf you take out an equity release product recommended by HUB Financial Solutions, Which? will earn a commission to help fund our not-for-profit mission
Lifetime mortgages are the most popular type of equity release and account for the vast majority of new sales.
With a lifetime mortgage, you take out a loan against your property, which is repaid from the proceeds when it's sold.
The sum you can borrow depends on your age and how much your home is worth. You'll need to be at least 55, but the older you are, the more you can borrow.
Exactly how much you can borrow will vary markedly from provider to provider. Currently, at age 65 you'll typically be able to borrow a maximum of between 35% and 39% of the market value of your home, rising to between 40% and 44% at age 70.
You can opt to take a lump sum – where interest is charged on the whole amount at a fixed rate – or take chunks of cash when you need it, only paying interest on the money you've taken. By spreading out the amount you borrow in this way (known as drawdown), you’ll reduce the impact of compound interest.
Equity release can prove useful if you have value tied up in your property, but are worried about having enough to live on in retirement, paying for care or funding large expenses.
You can use the tax-free cash however you wish and will be able to stay in your home for the rest of your life or until you move into care.
Opting for an equity release plan is not a decision to be taken lightly. It can be very expensive, especially if you don't make any voluntary repayments. This means that the amount you can leave behind for loved ones will be reduced.
If you change your mind, repaying your loan early often triggers an early repayment charge.
You must take professional advice before releasing equity from your home, and it’s important to choose an adviser who specialises in this area.
You can search for qualified advisers through the Society of Later Life Advisers. The Equity Release Council also has a member directory.
Select the option that best describes your current situation.
