Downsizing may not be the best option for UK's over 55s
Importantly downsizing within the same area means older generations can remain in their community and save money at the same time. The research from SHIP has found though that, despite this being a viable solution for some, for others this option can actually leave people worse off.
Their review of 25 UK local authorities with a high density of over 55s shows that in almost a third of cases, people looking at this option would either be worse off or not release sufficient money to make it worth while - when all costs were taken into account.
For instance those living in Herefordshire could find themselves on average £42,949 out of pocket after making a move, while those in Worcester would lose out by on average £39,725. At the other end of the spectrum those in Torbay (+£60,939) and North Lincolnshire (+£58,810) could release a significant amount of equity if they chose to downsize.
SHIP argues though that while those in authorities such as Devon (+£6,361), Cumbria (+£11,734) might feel the upheaval and potential costs associated with moving negate the relatively 'minor' financial gain. They also highlight the possibility of the over 55s being forced to leave the locality they have become accustomed to and moving to an unfamiliar area.
Andrea Rozario, director general of SHIP comments: "For many people, the home is their largest asset and releasing some of the equity will help them finance their retirement. The best way in which to do this depends on each individual's financial situation and preferences. However, equity release and downsizing should both be considered - they are not mutually exclusive and can work very well in conjunction."