Selling home to free capital and renting in later retirement?

[MarshaMarshaMarsha]

Pondering retirement options (long way off as only 45). We have no children so don’t want to have anything left to leave anyone. We will be mortgage free in a year or so. Will then be ploughing more into pensions. Is a good option to included in our planning that we sell our home at say 70 years old to free up all that capital (worth £500k now so hopefully a fair amount more by then)… and use that as part of our pension pot and to rent a retirement property with?!

it seems to make sense as no point having assets to hand down. But am I missing anything?!

Would you be downsizing and what would you be freeing the money up for other than not wanting to leave money to anyone?

Why not explore equity release on your own house instead? That way, you are not at the mercy of a landlord. Having kids myself, I wouldn’t touch it with a barge pole, but it might be the way forward for you.

DH and I have also considered this! We looked at the McCarthy stone type places, but for rent not to buy. Did some very loose sums and reckoned we could get a good 15 years rent from the sale of our house and have our pensions etc on top !

I asked about equity release a while back and I’m sure consensus was not to go down that route, but I’ll look into it again.

I think it’s very different if you have children/close relatives but we don’t and would rather free up the cash and enjoy it (even if that means some/a lot) will go on rent it should leave a big enough amount for us too.

Yes exactly. Would want it to be a retirement place (and I’m sure many will be going more down the rental route by then rather than sales).

The elephant in the room would be if one of us needed care, we would have to self fund due to the house sale money, however that's our 'rent pot' . Either way, we aim to go out with a bang and have nothing left!!

I am in a similar situation. I hope to first move to a bungalow in my late 60s. I am working on the basis that I could need a care home and hoping to make the leap straight from bungalow to the care home and use the sale proceeds to fund care. My worry with the "interim" part care flat is saleability at a point I need the full on version and ready cash.

equity release makes more sense surely

Everything I read on this makes it sound like a bad idea?!

Could you downsize instead? Release some money and not have to worry about rent money running out

Equity release rules have changed & you don’t have dc.

Read more about it

@MarshaMarshaMarsha Rebel Finance School sets this out and explains how to do this and why it might make sense. They are starting a new series on 1 June 2026.

I have always been an owner but it does make me think this might be an option.

I’ve signed up, thanks!

The problem here is the age old one when it comes to retirement planning........ how long are you going to live and what will your requirements be in later life?

Is this an imagined problem, do you NEED to sell up to release capital?
What are your pensions / savings / investments like, how are you going to spend it all plus the money released from the sale? Is it not possible that your income could exceed your outgoings and you end up with a significant estate anyway?
If you do manage to spend the capital, when do you slow down the spending (although it is an acknowledged fact that spending reduces in later life)?

You can rent a house / flat / apartment using pensions & proceeds from sale which in theory will give you plenty of spending money (if you NEED all that spending money?). Of course there is the chance that one or both of you may need a care home (although statistically you are more likely not to) and if so, I can tell you from experience that is expensive and again, no-one knows how long that may be required.

After looking at all that, you still need to decide who you will be leaving your remaining assets to (i.e. a will).

I think it is a good idea to move to a rental accessible independent living place. If one or other is poorly you have support around you. You have a home that people can easily clear after you have gone and you can have fantastic holidays with the equity. Equity release can be really difficult if you both lose capacity because it adds another layer of complexity to everything. If you don’t have Lasting powers of attorney to act for you it is better to have a simple set up.

We had one set of in laws downsize into a supported retirement flat. Nice flat. But, high service charges and when it was sold after 11 years it sold for about 60% of the price they paid for it, plus a % of the sale price went to the freeholder. The other in-laws took out equity release, which solved a business debt problem on retirement. 20 years later when FIL died, there was a miniscule amount of value left in the property, the majority of the sale price went to the insurance company. This left MIL at the mercy of social services when it came to finding her an apartment to downsize to and then a care home. A very stressful time. Renting is a better option than either of these. The problem with spending it all is how much do you need to leave fir care and support costs? Both Mil and DM lived for over 15 years after their spouses died, both needing increasing amounts of in home support, which, not as expensive as care homes, is not cheap. Plus walking aids, hearing aids, safety alarms, mobility scooters, dentists - it all costs a lot more than you think when you are 45.
If you rent, and we have considered selling and renting, I would select a charity to leave any money to, but leave at least £100k for care. It makes a huge difference in your final years.

Get Lasting Powers of Attorney set up. If you are OK with admin, and you have a simple set up, it is easy to do online. But, it is probably more important than having a will, but do that as well if you haven't. At 45 it seems a long way off before you need it, but I can assure you, one day you wake up and think How did I get to 70? Where has the time gone?

If you are a married couple in your own home, the house will not be touched for care home fees.
Any money in joint accounts from the sale of your property, half WILL be taken to fund care in a care home.... if you have no one to leave your money to, then equity release would make the most sense in your particular situation

Problem is you don't know how long you will live or how rent and service charges might rise in relation to your pensions, or what you might need for care. Financial advice sounds a good idea.

I met a man in his 70’s on a cruise and he had done equity release, gave his niece some money to upgrade her home and basically goes on loads of cruises. It was amazing listening to all the places he had been and all about these expedition cruises he likes. I’d look into equity release and renting can have its issues. I’d also do it before 70 personally.

Have you seen all the other posts about people struggling to find decent rentals and the fact smaller landlords are deserting the UK market? No way would I give up a house I own for the precariousness of renting.
assuming you live to average life expectancy eg c87 for women, though you could be one of the 1 in 5 who live to 100, will selling your house cover rent in an area you like and in a house you like plus appropriate for elderly people?

I was going to ask if you'd considered this, too. I know a few people who've done it. It's mostly painless, they just carry on in their home as before but with money in the bank (and paying rent, of course).

However, I see that you'd prefer to rent in a retirement development and I can understand that. Everything already in place, no need for all that angst about contract release because you aren't intending to 'buy' and attempt to leave it to someone.

You'll be sitting pretty, actually 😎 Your thinking looks perfectly sound to me! The best thing you can do in early retirement is bloody well enjoy it.

I wouldn't as private renting is still insecure even with renters rights act. You could be bedbound and the landlord give you notice.

It’s a bad idea because the interest gets rolled up with the loan and you can end up with nothing to leave in your will.

If that’s not something that is relevant to you, the fact you get to stay in your home until you both die (providing the contract is written like that which it can be), in my view outweighs the fact you are not getting the best return possible on your asset.

Edited to say: while things may change in the future, there is no way I’d want to risk being slung out of my home on a couple of months’ notice in my 80s with the risk of not finding anywhere else.

I did say it would be a retirement property, so a flat in a retirement living building. Would never buy one as fees are astronomical, but renters don’t pay a service charge in the ones I have looked at, and less risk of being turfed out. Obviously in 25/30 years there may be other options available.