People born in these years urged to 'downsize' home or face having to find £738,000

People born in these years urged to 'downsize' home or face having to find £738,000
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People have been urged to "downsize" their homes before retirement to offset the rising cost of packing in work. Only 40 per cent of high earners are on track for a "comfortable retirement," figures show, with UK households urged to act.

A comfortable retirement now requires a pension pot of £738,000 for a single person, research shows. Helen Morrissey, head of retirement analysis at Hargreaves Lansdown explained that when it comes to downsizing, experts are undecided on whether it’s the key to our retirement dreams or a potential disaster.

She said: "On the face of it, it seems like an ideal way to plug a shortfall in our retirement income. You can use the profit to supplement your pension while reducing day to day living costs through living in a smaller place."

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Less than a quarter (23 per cent) of people are planning to downsize in retirement, whilst 40 per cent wouldn't consider it at all. The remainder are unsure. Age plays a significant role in this decision. Only 16 per cent of over-55s would consider downsizing, compared to 25 per cent of those aged 18-34.

Ms Morrissey continued: "You may think you are on track to make a decent profit from a house sale but once stamp duty, legal fees and moving costs have been factored in, you may find you can’t afford the type of property you want in the area that you want it, and this may prove to be a sacrifice many are unwilling to make."

She explained the key is to "keep your options open". She said: "It means there are some tough decisions in store for many unless they can start plugging the gaps in their SIPPs and workplace pensions." Ms Morrissey said: "The regular drip feed of contributions over time alongside an employer contribution and long-term investment growth can help you build up a decent retirement income that will meet your needs in retirement."