Millions face retirement shortfall due to housing and pension policy, SPP finds

The Society of Pension Professionals (SPP) has published a paper warning that millions in the UK are at risk of falling short at retirement due to separate housing and pension policy. 

The paper, titled Home Truths: Rethinking Retirement Wealth, found retirees currently hold £3.84trn in housing wealth but face an annual retirement income deficit of more than £48bn.

The SPP pointed out that many retirement models still assume most people will retire mortgage-free. 

With homeownership rates falling and more people renting for life, renters need an estimated £269,000 more in pension savings to cover rental costs. 

The SPP said fragmented advice, separate regulations, and tax barriers like Stamp Duty stop people from making joined-up decisions about their wealth.

The SPP recommended merging housing wealth into mainstream later life advice platforms, updating retirement metrics to include rental and mortgage costs, and removing downsizing barriers such as Stamp Duty.

Other suggestions included building standardised housing investment vehicles to channel pension capital into new homes, restructuring employer contributions so younger savers can build up home deposits, and using pension capital to retrofit family homes sold to pay for social care.

Amanda Cooke (pictured), chair of the SPP Financial Services Regulation Committee, said: “Pensions and housing draw on the exact same household resources, yet policy treats them as completely separate worlds.