As you slowly start to creep towards retirement and your children have all grown up and fled the nest, many people decide the time is right to move to a smaller home that’s more suited to their needs as they get older.
But it’s not just about making sure you’re in a home that’s well-suited to you, as downsizing could also potentially free up thousands of pounds which you can put toward your retirement.
New research from PensionBee has looked at average house prices around the country to highlight how much can be saved by moving to a smaller home, revealing that moving to a home that’s just one bedroom smaller could save you tens of thousands of pounds.
In fact, here in Wales, the research revealed that the average person looking to downsize in Cardiff could save over £100,000 on average by moving to a smaller property.
For example, the research showed that even at the bottom end of the scale, those moving from a two-bedroom house in the city to a one-bed property will save around £66,000, a figure which increases to as much as £153,000 when downsizing from a five-bed to four-bed property.
Romi Savova, CEO at PensionBee, said: “Our research shows that a considerable amount of money could be tied up in your home. Given the stamp duty holiday, there’s arguably been no better time to downsize, especially if you’re approaching retirement and looking to grow your income.
“Increasing evidence suggests that the majority of us aren’t saving enough for retirement, and where it might not be possible to make larger pension contributions, property can help bridge the gap. As our data indicates, downsizing could release a significant sum, right across the UK, so it’s something that could be worth considering if you want to boost your retirement fund.”
However, while it’s clear that downsizing can save you a great deal no matter where you live, the research actually showed that Wales was one of the regions of the UK where savings were the smallest, which is likely due to the fact that Wales is generally one of the more affordable places in the UK to begin with.
Across the whole country, Wales was found to have an average saving of £90,366, which average house prices ranging from £471,800 for a five-bedroom house, to £110,336 for a one-bed.
When you see how much money can be saved by moving to a smaller property, you can see why some are being tempted to make the move earlier on in life, rather than waiting until they hit retirement.
Downsizing also gives the opportunity to get out of the city as you look to switch to a more relaxed pace of life.
For those living in Cardiff or the nearby cities of Swansea and Newport, there are plenty of desirable towns and villages that are just a short distance away, which can also see you free up lots of money for retirement.
For example, moving from a three-bed property in Cardiff to a two-bed in Caerphilly could save you £97,284, while making the same move between Swansea and Porthcawl will save £97,807.
As you can see, downsizing can end up making you some great savings which will go a long way when it comes to retirement, but it’s important to factor in the costs of moving too, including removal costs and all of the necessary agency fees, surveys and legal costs.