The retirement conversation is changing. Are we changing with it?

By Kay Westgarth, Head of Retirement Distribution at Aviva

The latest The Retirement Compass 2026 paints a compelling picture of the retirement challenge facing millions of UK homeowners and the increasingly important role housing wealth could play in addressing it.  

The report estimates that 3.7 million homeowner households aged 55-79 have, or are on track to have, retirement incomes below the Pensions UK moderate retirement living standard. This figure represents almost half of homeowner households in that age group. At the same time, many of these households own significant property wealth.

For advisers, that raises an important question: If property is often a client's largest asset, should it still sit outside the retirement planning conversation?

Valuable homes. Modest retirement incomes.

One of the report's most striking findings is that housing wealth and retirement income are not always closely linked.

Many homeowners with housing wealth of between £200,000 and £400,000 – or even more than this amount - are projected to fall below the moderate retirement living standard. Among couples with more than £400,000 of housing wealth, one in five are still expected to fall below this benchmark.

This highlights an increasingly common reality for advisers: clients may hold significant property wealth but have limited retirement income.

While pensions, savings and investments remain fundamental, housing wealth is becoming an increasingly important part of the wider retirement planning picture. The opportunity for advisers is to help clients consider all of their assets together, rather than viewing property wealth separately from retirement planning.

The growing mortgage challenge

Perhaps the most overlooked finding in the report relates to mortgage debt in later life.

The report highlights the growing role that mortgage debt may play in later-life planning, as more homeowners approach retirement with borrowing still to repay. At the same time, attitudes towards later-life borrowing are changing. The report found that 52% of homeowners aged 55-79 believe it is acceptable to have a mortgage in later life.

For advisers, this raises an important question. Is the challenge always generating more retirement income, or is it sometimes removing debt that continues to place pressure on retirement finances?

For some clients, later-life lending may provide an opportunity to repay an existing mortgage, remove monthly repayments and improve affordability in retirement. Rather than stretching pension income to meet ongoing mortgage commitments, clients may be able to make better use of the equity already built up in their home.

This feels particularly relevant for homeowners approaching retirement who are still working, are concerned about their retirement finances and have yet to fully repay their mortgage. The report suggests this group represents a significant proportion of households expected to fall below the moderate retirement living standard.

For advisers working with clients in their late 50s and early 60s, this could become an increasingly important conversation over the coming decade.

An important opportunity for women

The report found that single women account for almost a third of new equity release customers and are more likely than any other group to fall below the moderate retirement living standard. In fact, 65% of single female homeowner households aged 55-79 are either below, or on track to be below, this benchmark. And this despite often holding significant housing wealth.

Many of these women have relatively modest pension provision but substantial equity tied up in their homes. The research found average housing wealth of around £225,000 among single women homeowners.

This reflects a challenge advisers will be familiar with. Women are often more likely to have experienced career breaks, part-time working or other life events that can impact pension accumulation over time. Yet housing wealth may have continued to build throughout those years.

For some clients, this can create a disconnect between the income available in retirement and the assets they have accumulated elsewhere.

The research highlights the importance of tailored retirement planning and making sure that all available assets are considered when helping clients achieve better retirement outcomes. For some single women in particular, housing wealth could represent an important source of financial flexibility alongside their other retirement assets.

Gifting becomes part of the retirement conversation

The report also reinforces a trend many advisers will already recognise. Consumers increasingly want to see the benefits of their wealth while they’re still here to enjoy it.

The report also highlights gifting as one potential use of housing wealth. Customers’ desire to support younger family members is featured across different customer segments.

With younger generations continuing to face affordability challenges, many retirees are choosing to help children and grandchildren sooner rather than later. This could mean supporting a first home purchase, helping with family expenses or creating opportunities they may otherwise struggle to access.

For some families, gifting during retirement can be every bit as important as passing on an inheritance later. From April 2027, most unused pension funds and death benefits will be included within estates for inheritance tax purposes. This may bring another reason to discuss when and how clients pass on wealth, while making sure they still retain enough income and capital for later life.

Retirement is about more than income

One of the most encouraging aspects of the research is that it highlights the emotional drivers behind financial decisions. When asked how they might use housing wealth, 25% cited paying for care in their own home, 24% increasing pension income and savings, and 16% each home adaptations and care-home fees.

This reflects something we increasingly see in the market. Consumers don't wake up wanting an equity release product. They want outcomes. They want greater financial security, a home that continues to meet their needs and more choice over how they fund later life. Housing wealth can help make those aspirations possible.

For many customers, it's no longer just about addressing a financial shortfall. It's about making the most of retirement and living the life they've worked hard to build.

The advice opportunity

Perhaps the most important finding for advisers is that awareness exists, but engagement remains low. While 70% of homeowners aged 55-79 are aware of equity release, only 13% have considered taking a lifetime mortgage. To us, that suggests the challenge is no longer simply awareness. It is helping clients understand where property wealth might fit within a broader retirement strategy.

The Retirement Compass demonstrates that attitudes towards later-life borrowing continue to become more positive, while financial pressures in retirement continue to grow.

Against that backdrop, advisers have an increasingly important role to play. Housing wealth can form part of a wider and more holistic planning conversation. This holds true whether the objective is supplementing retirement income, repaying an existing mortgage, supporting family, funding home improvements or simply helping clients enjoy more of the moments that matter.

And as the retirement landscape continues to evolve, enabling clients to make the most of all their assets - not just some of them - may be one of the most valuable pieces of advice we can provide.