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How much have house prices increased compared to pensions in 10 years?

A recent report from the later life lender, More2Life has revealed some alarming facts about pension rates over the past decade compared to average UK house prices.

A photo of Dom Limberg, the author

By Dom Limberg

Published on: 11 June 2024

2 min read

How much have house prices increased compared to pensions in 10 years?

A recent report from the later life lender, More2Life has revealed some alarming facts about pension rates over the past decade compared to home owners. The survey found that pensioners had seen a miniscule 1% increase in their average weekly pension income since 2013.

The report also compared data from the Office for National Statistics (ONS) which showed that the average weekly pension income had increased by just £29 (from £320 in 2013 to £349 in 2022). After the peak in 2021 of £376, pension income fell for the first time on record since 2017 to £349 in 2022.

It is also predicted that the average pension income will fall again in 2023, which is yet to be revealed. The fall last year is likely to be a direct result of more economic problems, which is going to cause further issues for those in retirement on fixed incomes and especially the elderly.

The report also shows that property prices have increased by an astonishing 67% between 2013 and 2022, meaning that many retirees have significant equity in their homes. This figure also does not take the inflation levels in to account so this figure would be slightly less as a direct comparison of actual real value of your property.

This also means that many people over 50 could access this money from the equity in their home to use to help fund their retirement. The later life lending mortgage market (or equity release mortgages) has seen a major resurgence in recent years because of the housing market.

For pensioners who have struggled with increased costs recently, financial expert Martin Lewis recently appeared on ITV’s This Morning to share his top ‘pension secrets’ to help UK residents to make the most of their pensions.

6 Pension Secrets That Could Get You an Extra £10,000 or More | This Morning

Figures suggest that the average homeowner in the UK has at least £70,165 of equity in their main residence. Analysis of the Bank of England Mortgage and Lending Report data by the property experts at Jones Lang Lasalle (JLL), shows that 62% of homeowners (8.2 million households) has at least 25% equity in their homes.

Based on the National Average House Price of £280,660:

  • 62% of homeowners in the UK has over £70,000 of equity.
  • 34% of homeowners has between £28,000 and £70,000 of equity.
  • 4% of homeowners has between £14,000 and £28,000 of equity.
  • 0.2% of homeowners has less than £14,000 of equity.

This report shows that UK homeowners could be sat on significantly more equity in their home than they think. Many over 50’s don’t automatically think about the potential for using the equity in their home to help to fund their retirement, but this could be a far more suitable option for many.

Below are more of our recent mortgage news and guides for homeowners and mortgage borrowers in the UK.

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