The events of the past 18 months are the driving force behind around 12% of people aged over 50 in the UK to relocate in retirement, moving closer to family and friends, pursuing a better quality of life or even moving abroad, according to new research from Legal & General Retail Retirement.
In 2020, the Office for National Statistics revealed that people of retirement age in England were already leaving major urban areas and instead moving to rural areas, locations by the coast or to areas of ‘outstanding natural beauty’. The data demonstrated that Dorset, Shropshire and Wiltshire were ‘retirement migration hotspots’, while England’s largest cities saw net outflows of retirement-age residents, with London, Birmingham and Bristol seeing the largest number of exits.
Nearly a year on, Legal & General’s research has found that the pandemic has influenced some over-50s to plan a move after a year of lockdowns. Over-50s want to relocate to somewhere that offers a better quality of life (7%), to move close to friends and family (4%) or to live abroad (3%).
When planning a move, many over-50s consider how the value of their current home plays a role in their long-term plans. 1.3 million pre-retirees over 50 (9%) see themselves as more likely to turn to their property wealth to fund their lifestyle than before the pandemic. In instances where people are relocating, they may downsize to free up property wealth. However, some may already have chosen to access the equity in their homes via a lifetime mortgage, which they may be able to port over to a new property in a different location.
Key things to consider before relocating to a new area:
Think about how you are currently using your home equity – people who have already taken advantage of a lifetime mortgage can choose to move but there is a process to be mindful of and you may choose to take professional financial advice first. You may be able to transfer your existing equity release to your new property if it meets your provider’s lending criteria. If you choose to relocate to a less expensive property you may also need to repay some costs to your provider, but this could be covered by savings made from the sale of your existing home.
Make sure your new home is as future proof as possible – it’s important to think carefully about the type of property you choose and whether it will suit you for the long term. Is it accessible or could it be easily renovated to meet your needs in the future? For people who need to update or adapt their home, a retirement interest-only mortgage or lifetime mortgage may be options to consider. Consider whether local transport links will work for you now and in the future.
Understand how a new area might impact your living costs – it’s important to consider any difference in living costs between areas and whether overall, you are likely to spend more money, or save money, in your new location.
Claire Singleton, CEO, Legal & General Home Finance, comments: “Relocating in retirement was already a well-observed trend, with older people reprioritising their needs as they enter the next stage of their life. As with many aspects of our lives, the challenges of the pandemic seem to have led many people to take stock of their current living situation. There can be many benefits to relocation, whether it is a better quality of life, more space or even the opportunity to be closer to loved ones.
“One thing that is clear is that many people will also see their decision informed by how their property wealth factors into their long-term financial planning.”