12.2 Million People Are on Course for Retirement Poverty — Could Your Home Be the Answer?

What the figures actually mean

The Scottish Widows Retirement Report 2026 found that 31% of UK adults — 12.2 million people — are on course for a retirement income below the minimum lifestyle standard. That figure has improved from 39% (15.3 million) in 2025, partly driven by higher non-pension savings and home ownership rates. Progress, but not enough.

What counts as "minimum"? According to the Pensions and Lifetime Savings Association, the minimum retirement standard equates to roughly £14,400 per year for a single person. That covers basics: around £55 per week on food, one UK holiday a year, and no car. It is not a comfortable retirement by most people's standards.

The comfortable retirement standard — which most people say they want — sits at around £43,000 per year. The gap between minimum and comfortable is enormous, and pension savings alone are falling far short for millions of households.

Why pension fixes won't help those near retirement now

The Scottish Widows report recommends raising auto-enrolment contribution rates from the current 8% to 12%. That would help future retirees accumulate larger pension pots over decades of saving. But it does almost nothing for people who are already 55, 60, or 65 and approaching retirement within the next few years.

If you're in or near retirement today, the pension you have is largely the pension you'll get. Contribution increases from here on will make a modest difference, but they cannot close a multi-decade savings shortfall in five years. For this group, the question is not how to save more — it's how to make the most of what they already have.

For many homeowners in this position, that leads to a conversation about property wealth.

Property wealth: the asset many aren't accessing

UK homeowners aged 55 and over collectively hold trillions of pounds in housing equity. Many of these households have seen significant increases in property values over the past two or three decades, and own their homes outright — or with a small remaining mortgage. Yet they are income-poor in retirement, with pension and savings income that falls well short of a comfortable standard.

Equity release and lifetime mortgages exist precisely to address this imbalance. They allow homeowners aged 55 or over to access some of the value locked in their property — as a tax-free lump sum, a drawdown facility, or in some cases a regular income supplement — without having to sell or move.

The key options include:

• Lifetime mortgage: The most common form of equity release. You borrow against your home, with interest rolling up. No monthly repayments required. The loan and interest are repaid when the property is eventually sold — typically when you move into long-term care or pass away.
• Drawdown lifetime mortgage: Similar to a lifetime mortgage, but you take smaller amounts over time rather than one lump sum. Interest only accrues on money actually drawn, which can reduce the overall cost.
• Retirement interest-only (RIO) mortgage: You pay the interest each month but not the capital. The loan is repaid on the eventual sale of the property. This suits homeowners with enough income to service the interest but who don't want capital repayments.

Addressing common concerns

Many homeowners hesitate to explore equity release because of concerns they've heard — some well-founded, some outdated. It's worth addressing the most common ones directly.

Will I still own my home? Yes. With a lifetime mortgage, you remain the owner. You can continue to live there for the rest of your life.

What about my children's inheritance? Equity release will reduce the equity available to pass on. This is a genuine consideration, and a good adviser will explore it with you openly. Some plans allow you to protect a portion of your property's value for inheritance. It's a trade-off that needs to be understood and discussed with family if appropriate.

Can I move home? Most modern lifetime mortgage products are portable. If you move to a suitable property, you may be able to transfer your plan. Your adviser will confirm whether the new property meets lender criteria.

What if house prices fall? All Equity Release Council-approved products include a no-negative-equity guarantee. You can never owe more than your home is worth, regardless of what happens to property prices.

FCA-regulated advice is mandatory — and important

Equity release is a regulated financial product. By law, you must receive independent FCA-regulated financial advice before proceeding. This is not a formality — it's a genuine safeguard designed to ensure that equity release is right for your circumstances, that you understand the implications, and that the product you choose is appropriate.

Verity Home specialises in equity release and later-life lending advice for homeowners in England and Wales. Our advisers work on a whole-of-market basis, which means we can compare products from across the market rather than recommending a single provider's range.