The UK can no longer treat housing and pensions as separate policy issues if it hopes to solve the growing retirement adequacy crisis, according to a paper published by the Society of Pension Professionals.
The paper, titled “Home Truths: Rethinking Retirement Wealth”, noted that UK retirees currently hold an estimated £3.8 trillion in housing wealth, yet face an aggregate annual retirement income deficit exceeding £48bn.
The SPP paper also claimed that with declining homeownership rates and a sharp rise in lifelong renters, who require an estimated £269,000 more in pension savings to cover rental costs, the current system is leaving millions unprepared. It went on to warn that fragmented advice, separate regulatory regimes, and tax barriers like stamp duty prevent people from making holistic decisions about their wealth.
Amanda Cooke, chair of the SPP Financial Services Regulation Committee, says: “Pensions and housing draw on the exact same household resources, yet policy treats them as completely separate worlds.
“While current retirees often rely on property equity to mask savings shortfalls, future generations facing high rents and lower homeownership rates simply won’t have that cushion.”
The SPP paper recommended that the UK government merge housing wealth into mainstream later-life advice platforms such as MoneyHelper and Pension Wise. In addition, it called for revising the Retirement Living Standards and Value for Money frameworks to explicitly account for rental and mortgage costs in later life.
