RISING house prices over the last 15 years mean many retirees in Devon are living in an increasingly-valuable asset that has grown at double the rate of the average pensioner income, the Equity Release Council has found.
Analysis of the latest data from the Land Registry and Office for National Statistics (ONS) shows house prices in Devon have grown by 104 per cent or £119,426 in real terms since 1997, from £114,399 to £233,825.
In comparison, the average retiree's income has risen at half the speed – just 46 per cent – over the same period. This has taken their average gross income from £12,228 to £17,854, and added an extra £5,626 to their annual budgets.
A recent House of Lords committee report – Ready for Ageing? – suggests many old people have insufficient savings and pensions to live comfortably in later life.
Devon has one of the highest proportions of over-55s nationwide (43 per cent compared with 28 per cent), and even by saving the extra £5,626 from their annual incomes, it would take the average retiree 12.8 years to reach the £72,000 contribution towards long-term care costs before Government assistance becomes available.
While the average retirees' income has risen in the last five years, uncertainty in the housing market has meant average property values in Devon have fallen by nearly a fifth.
Nevertheless, this relative gain in pensioner income in recent times is hugely outweighed by the fact property values in the area have doubled over the past 15 years.
Nigel Waterson, chairman of The Equity Release Council, said: "Pensioner incomes have been consistently rising over the past 15 years but certainly not at a rate to address the worry about how many older people will fund their retirement, including the costs of care.
"The cost of everyday essentials, combined with a lack of pension savings and investments, means many are finding themselves approaching later life without sufficient funds to maintain their lifestyle.
"In many cases equity release can offer an alternative to selling their home to help them get by. Our code of conduct makes sure anyone who takes out an equity release product has the right to remain in their home, which avoids the wrench of downsizing and also limits the amount they can owe.
"As people look for ways to make their finances work in later life, speaking to a specialist adviser about equity release, as well as other retirement products, is an important part of the process."
