A new study from Savills highlights the financial benefits of downsizing for retirees in England and Wales, showcasing potential disparities across regions and the additional support from government cost of living payments.
A recent study by Savills has unearthed the financial benefits that can be gained from downsizing homes during retirement in England and Wales. The research suggests that moving from a four-bedroom to a two-bedroom house can free up approximately £305,000 in funds, offering retirees a potential monthly income of around £1,200. This financial windfall, however, is not uniformly available across all regions, with a marked disparity between the north and south of the country. In particular, London residents could enjoy monthly benefits of £2,523 from downsizing, compared to £826 in the north-east, reflecting the long-term property price increases in the southern regions.
The study also noted that many older homeowners are reluctant to downsize due to emotional attachments, concerns over finding suitable properties, and additional costs like transaction taxes and fees, with stamp duty highlighted as a particularly significant deterrent. Recommendations to spur downsizing include stamp duty exemptions for older individuals and council tax policy reforms.
Meanwhile, the UK government has begun disbursing the final installment of the cost of living payment to approximately 700,000 households, with payments of up to £900 labeled “DWP COL” being deposited directly into bank accounts. This initiative, overseen by the Department for Work and Pensions and HM Revenue and Customs, aims to mitigate the financial strain on eligible recipients amidst economic challenges. The payments, which are tax-free and do not affect existing benefit awards, are part of a suite of measures including Cold Weather Payments, the Warm Home Discount, and the Winter Fuel Payment to support individuals during the winter months.
Recipients are advised to allow until after February 23 for all payments to be processed before querying non-receipt, as the payments are automated and require no action on their part. This effort is designed to provide crucial assistance to those facing financial difficulties during these challenging times.
