Over-reliance on property is a perilous path

released – combined with the state pension – would generate an income of barely half of pre-retirement wages.”

It goes on: “The volatility of house prices can mean that the timing of retirement is crucial. Whereas those who invest for retirement in a diversified range of assets can smooth out the peaks and troughs of various investments, those who are dependent solely on the value of their family home could find their retirement plans thwarted by a sudden house price drop.”

The need to generate cash in such circumstances, where perhaps large numbers of baby-boomers are all trying to offload properties at the same time to an already stretched younger generation, might lead to a forced sale with a much reduced price being obtained. House prices aren’t guaranteed to go on rising forever. And there could be other snags.

Growing numbers of adults are still living at home when their parents reach retirement. The average age of a first-time buyer in the UK is now estimated to be 31, and rising each year. The total number of young adults aged 15-34 living with their parents has increased by one million since the late 1990s, from 5.5 million in 1998 to just over 6.5 million in 2015.

And what if the mortgage hasn’t yet been paid off?

Many more people, including firsttime buyers, are taking out mortgages past traditional retirement ages. So you may not be able to afford to put your feet up – the fastest growing section of the labour market has been among older workers and more people than ever are working beyond 65.

Then there is the difficulty in finding a suitable property for downsizing plus the psychological effect of moving out of your cherished family home just at the point where you are going to be spending more time in it.

How are you going to cope in a smaller place when the grandchildren want to stay? What are you going to do with all the furniture and keepsakes you have accumulated?

Indeed, none of this is as easy as you might first think. And let’s not even go into care costs, which can decimate family finances.

Are there then alternatives such as renting out a spare bedroom or using equity release products rather than downsizing?

Royal London advises: “Renting a room could generate a useful income but would not be enough in most cases to replace the value of a pension.

Equity release remains a very small market and the typical amounts generated through “lifetime mortgages” would not sustain the sort of income in retirement to which most people would aspire. Whilst some may believe that house prices are a “one way bet”, with constant talk about record house prices, the reality is that relying on one property – your own home – to fund your retirement remains an extremely risky strategy.”

The message should be that downsizing is fine as part of a wider retirement strategy including pensions and other investments, and any equity in the home should be viewed as something of a bonus. Trevor Law is managing director of Merito Financial Services, chartered financial planners,

based in Solihull. Email: tilaw@meritofs.com