Why 64 is the ideal age to downsize

The ideal age to downsize to a smaller property is 64 - at which point the family home starts to feel needlessly oversized, and a real headache to maintain, according to a new survey.

The research by estate agent Retire Move found that after the age of 60 around half of all retirees find it a struggle to maintain their home, and a third have difficulties keeping the garden under control. At the same time one in five said their home felt too big, and a third agreed that they had rooms they hardly used.

They identified 64 as the ideal age to downsize, because it means people are still young enough to enjoy their new home and its surroundings, and still able to cope with all the challenges posed by the process of buying and selling property. Richard Drew, Retirement Move chief executive, said: "The prospect of moving home is daunting whatever your age but downsizing at the right time can help avoid years of struggling to manage a larger space or feeling overwhelmed with your current property."

Retirement solution?
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Downsizing can also release a substantial amount of cash from your home, which can transform your retirement prospects. Lloyds Bank recently revealed that downsizing from a detached house to a bungalow frees up an average of almost £104,000, while those who move into a semi-detached property could free up an average of almost £122,000. The move has the added advantage of reducing outgoings for things like maintenance and regular bills.

It's no surprise, therefore, that a recent study by Barings discovered that 7% of people – the equivalent of around 2.5 million people – admit they are planning on selling their home to fund their retirement.

However, anyone planning to rely on this for a retirement windfall needs to be very careful. Property is not always easy to buy and sell, so you may not be able to sell for the price you need at the time you want. In addition, different areas have very different markets, so if you plan to downsize in an area with very little smaller property - and high demand for it - you could make far less than you were expecting from the move. Plus, of course, there's the cost of moving itself which easy runs into tens of thousands of pounds, which can erode your windfall substantially.

The experts say, therefore, that downsizing may well be the right thing for many older people, but that they shouldn't rely on a downsizing windfall in order to make ends meet. Rod Aldridge, Head of UK Wholesale Distribution at Barings, says: "It is worrying that the number of people relying exclusively on their property to fund retirement has increased again. Property can, of course, form part of a diversified investment portfolio but this year's research indicates that more people are investing in property as a retirement source and this could mean they are too concentrated in the asset class. Property prices can be volatile so relying on your home to provide all your income to fund retirement is risky."

But what do you think? Are you planning to downsize? Is it going to make your fortune? Let us know in the comments.

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