Property pensions are a popular way to fund a retirement, according to a new report.
Property owners over 60 and approaching retirement own homes worth almost £1 trillion – almost 25% of the £4.1 trillion of property privately owned in Britain.
More than half (52%) are planning to draw cash from their property to ease their finances in retirement, says the study from pension provider LV=.
The research also reveals more than 200,000 over 55s have already taken cash from their properties or downsized in the past year as part of their retirement planning.
Others are hoping to top up pensions with rents from holiday homes or buy to lets.
The report also found the average home owned by someone over 60 is worth £272,000.
Around 75% are mortgage free, while 8% own a second home.
The race for cash is prompted by recent increases in home values and a corresponding drop in interest rates that make other forms of saving unattractive as the returns are lower than those offered by investing in property.
However, the study also highlighted around 20% of over 60s need to unlock equity in their homes because they have failed to save enough in a pension to fund a comfortable retirement.
Richard Rowney, Managing Director of Life & Pensions at LV= said: “Small pension pots, a lack of retirement savings, and the continuous rise in house prices are undoubtedly factors that have led to a rise in the number of people using their home to boost their retirement income.
“If someone has lived in their property for a long time the capital they can access from it will often outweigh the pensions savings they have.
“With people spending longer in retirement one of the challenges that many will need to overcome is how to fund it and how to meet the financial demands they may face in later life, including long-term care and the money tied up in their home may present them with a solution.”
In the last year, the LV= report shows 114,000 over 55s have released equity in their homes, while another 76,000 having freed up cash by downsizing.
Much of the money has been spent on holidays and luxuries, but some have repaid mortgages and other debts.
Almost 40% of those who have released equity will spend the cash to supplement their retirement income and 4% will use the money to cover care costs.