Property no longer pension option

Friends Provident is urging homeowners to review their plans for financing retirement, if they have been banking on raising cash from property to provide a nest egg at the end of their working lives.

The firm’s head of pensions, Jeremy Ward, warns that if house prices continue to fall, people could find themselves in serious financial difficulty with both negative equity on their property and no personal pension.

According to the life and pensions provider, should property prices fall to the level seen in the slump of 1992, the average homeowner could be left with negative equity of £89,850.

The calculation is based on figures from the Council of Mortgage Lenders which put the current average mortgage at £129,000 with an 80% loan-to-value ratio.

 

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