The Retirement Savings Gap and the Role of Housing Wealth

The latest findings from the Second Pensions Commission's interim report add fresh weight to a growing issue: too many people are not on track to achieve the retirement income they expect. With around 15 million people currently undersaving for retirement, and that figure projected to rise to 19 million, the scale of the challenge is becoming harder to ignore.

For advisers, that reinforces the need for broader later life planning conversations. Pensions and savings will remain central for many customers, but for some, they may not be enough on their own. That means housing wealth is likely to become an increasingly important part of the wider planning picture where appropriate.

What the latest findings tell us

The Commission’s interim report makes clear that, while the UK pensions system is stronger than it was 20 years ago, major adequacy challenges remain. Automatic enrolment has increased participation, but many people are still not saving enough, particularly low and middle earners, and the outlook is expected to worsen over time.
Just as importantly, the findings show that retirement adequacy cannot be viewed solely through the lens of pensions. Wider forms of wealth, including property, can materially affect outcomes, underlining the role homes can play in supporting later life planning.

Why housing wealth is moving up the agenda

For many customers in later life, their home remains their largest single asset. As longer retirements and rising living costs continue to put pressure on traditional savings routes, the retirement planning conversation is naturally becoming broader.

That creates a real opportunity for advisers to work more closely with other financial advisers, specialist later life advisers and mortgage brokers to widen understanding of equity release and lifetime mortgages. By sharing knowledge and increasing confidence in where these solutions may fit, the industry can help ensure more customers benefit from informed, joined-up conversations about the options available to them.

What this means for advisers

For advisers, the growing under-saving challenge is another reminder of the value of joined-up later life planning. It is also a chance to keep expanding understanding across the advice market, so that more professionals feel confident discussing the role that housing wealth, equity release and lifetime mortgages may play alongside other planning options.

As ever, the key is suitability, clarity and good customer understanding. The role of the adviser is to help customers understand their options, weigh up what is right for their circumstances, and make informed choices with confidence, and that is strengthened when advisers can draw on a broader network of specialist knowledge and support.

Supporting better later life planning conversations

At Pure Retirement, we believe these latest findings reinforce the importance of looking at later life planning in the round. Pensions and savings remain a vital part of the picture, but they are not always the whole picture. That is why we continue to support advisers with the insight, tools, and resources needed to help customers understand their options and, where appropriate, consider the role property wealth can play as part of a broader financial strategy.

Scott Burman, Head of Distribution at Pure Retirement, said: 

“These latest figures highlight the importance of taking a broader view of later life planning. While pensions and savings will remain central to retirement income for many, they may not always be sufficient on their own to meet evolving needs and expectations in later life. That’s why it’s important that customers are aware of the full range of options available to them, and that advisers are equipped to support informed conversations around how different assets, including property wealth, can form part of a wider financial strategy where appropriate.”

As the retirement savings gap continues to grow, conversations around income in later life will need to evolve with it. By building stronger links across the advice market and expanding understanding of the role later life lending can play, advisers can help more customers access joined-up guidance and better retirement outcomes.

To learn more about the equity release market, visit our later life lending opportunities