The total property wealth of over-55s in England will double to almost £2.5trillion by 2035, according to research by Age Partnership, a retirement income specialist.
The company says the findings highlight a major long-term shift towards the importance of housing wealth in retirement Financial Planning.
According to Age Partnership, over-55s in England are currently sitting on £1.2 trillion worth of property wealth. In the next twenty years, this is forecast to more than double (105%) to £2.5 trillion, if property prices in the UK rise by a modest annual average of 2%.
Even if house prices remain completely flat, the housing wealth of over 55s is forecast to increase by 38% to £1.7 trillion by 2035. (see table 1)
With inflation currently hovering around zero, any increase in housing wealth currently means a real terms increase in spending power, says Age Partnership.
The 15.9m people in England currently aged 55 or older is expected to rise by over a third (33.8%) to 21.3m by 2035 as people live longer. This compares to a much slower growth of 10.8% for the population of England as a whole, says the company.
One of the main drivers for the growth in this age group is that the large post-war baby boomer generation that is currently at or nearing retirement age is expected to benefit from longer life expectancy. This generation has also benefited from rising house prices, says Age Partnership.
Source: Sipps Professional Friday 6th November 2015