Pensioner property wealth shrinks in Scotland and London

Over the past three months, Londoners have seen average falls of more than £62,000 with Scots suffering declines of nearly £16,000.

The South East of England has now replaced London as the wealthiest region for over-65s accounting for a fifth of all UK pensioner property wealth. But despite the recent fall, since Key's first index was published in 2010, Londoners have gained an average of £137,000 each over the period or £22,800 per year.

Over the same perid, total pensioner property wealth has increased by around 24% or £245 billion which is worth around £55,000 on average for every homeowner. Owning a home has been worth around £9,100 a year for over-65s.

Pensioners who have paid off mortgages earned an average of £19,120 tax-free each from their houses in the past three months taking their property wealth to a new record high.

Dean Mirfin, technical director at Key Retirement, said: “Property wealth is a growing asset for pensioners highlighting the success of investing in a home for the over-65s.

“The long-term story as highlighted by our research is that property has performed very well with average over-65s making more than £9,000 a year during a period of record low interest rates and stock market volatility.

“That is demonstrated by the average £76,300 that pensioners are choosing to release tax-free from their properties to enhance their retirement standard of living in general as well as to use for a wide range of purposes from holidays to considerable home improvement projects. With record low interest rates it is hardly surprising that property gains are being capitalised upon throughout the UK.”