Should you move to a smaller property in retirement?

Retired couple sitting on sofa at home, relaxing, woman with laptop smiling, man with head back wearing headphones, lost in music, sitting side by side on blue sofa in retro style living room

The benefits of downsizing

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For some, downsizing can deliver huge financial and practical benefits – not just now, but for the future. Moving to a smaller property can often free up funds, but also mean lower monthly household bills.

Maybe you’ve thought of moving to a property that’s easier to manage as you get older. A home that was bought 20 years ago, might not be as suitable for your needs now. Perhaps more challenging to move around in or not as easy to maintain.

Finding a suitable property

Downsizing isn’t always simply about finding a smaller property – it needs to be right for you too not just now, but also in 10 or 20 years’ time.

While around one in three homeowners will consider downsizing in the next five years*, RT’s Money Partner, Key’s study shows they had a range of concerns, including not being financially better off by downsizing, not being able to move because of the costs involved and wanting to, but being unable to find a suitable property to move into.

Could releasing tax-free cash from your home be an answer? Find out how much you could release here Could you release tax free cash from your home?

Adding up the cost

While downsizing can free up funds, there are other financial considerations to factor in when moving, such as estate agent fees, survey and solicitor fees.

Other expenses include stamp duty and removal costs. Turning your new house into a home – renovating a bathroom, clearing a garden or simply redecorating – can also eat away into your finances.

Of course, finances aside, there is the emotional side of downsizing to consider. Leaving the family home or moving away from friends can also be a wrench, particularly in retirement when there’s now the time to spend in the garden or with grandchildren in your home.

Another way

Downsizing and leaving the home you love isn’t the only option when it comes to having more cash in retirement. You could release some of the value tied up in your home through RT Money partner Key Equity Release. Their plans involve a lifetime mortgage, the most popular form of equity release which is a loan secured against your home.

Find out more about unlocking cash from your home with their free guide to equity release Learn how you can stay in the home you love and have the funds to enjoy retirement

And, with Key Equity Release plans you will always remain the owner of your home, with a guarantee that you will never owe more than your home is worth. There are typically no monthly repayments to make as the loan, plus roll up interest, is repaid when the plan comes to an end.

Available to homeowners over 55, your home is likely to be your biggest asset, particularly if you’ve benefited from an increase in house prices over the past few decades.

 

Find out how much cash you could release Calculate how much you could release here

Downsizing protection

Just because you take out equity release, doesn’t mean you can’t downsize in the future either. With some Key Equity Release plans if, for any reason, you need to move to a smaller home after five years of taking out a lifetime mortgage, you can pay the loan back early without incurring an early repayment charge if the new property does not meet the lender’s criteria.

Remember equity release will reduce the value of your estate, and could also affect your entitlement to means-tested benefits.

We all have questions

When it comes to equity release, we all have questions. At Key, they believe the first thing to work out is whether equity release is actually right for you. They’ll ensure you consider your options with you, including downsizing or using other forms of borrowing, and if equity release isn’t right for you, they’ll tell you.

Radio Times has partnered with Key Equity Release to provide your FREE equity release guide for the answers to all of your questions. Call free on 0808 208 5406

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* Research conducted by independent researchers Consumer Intelligence among a sample of 502 homeowners aged 65 between May 17th and June 4th 2018