FOOL'S EYE VIEW
Is Your Home A Pension Fund?

By Jane Mack (TMFJane)
July 23, 2002

If you missed page 5 of the Daily Telegraph's property section on Saturday, then you just missed a huge chance to dream wonderful and, (probably) fruitless dreams about your future. But then, aren't all dreams like that?

Before you read any further, take a look at this beauty of a property.

It's a castle.
It's got 37 acres
It's got a mile and a half of coastline
It's on the market for only £450,000

Okay, so the last bit is probably a bit much for many of us but with a house that size you could buy it with a couple of friends and not really see that much of them around the place – especially with all that land. Unfortunately, rather a lot of people have had similar thoughts, not to mention various hotel chains, I'm sure. Since the article appeared on Saturday the estate agents have sent out more than a thousand brochures so it's unlikely it's going to sell for a mere £450,000. Damn!

Anyway, the point is, like many people I've become addicted to the property pages of various newspapers. Property prices seem to be the topic of conversation these days, particularly amongst those of us who live within the ever-expanding London commuter belt. In some areas, houses have seen price increases of as much as 20% over the last year and I happen to live in one of them.

Three of my neighbours have recently put their homes on the market and when I heard what they went for I was, to say the least, a bit stunned. It appears that my husband and I have, completely inadvertently, acquired about three-quarters of our desired retirement fund purely because we bought our Berkshire home in the mid-eighties just before the last housing boom really took off.

Of course, if we sold up, we'd have to use some of the money to buy somewhere else to live but if cheaper places like France don't appeal then certain parts of Devon and Somerset do. Or else we could join my younger brother in Wales where houses seem to cost about as much as the price of a new car and the average student debt.

The trouble is, I haven't yet become adjusted to the thought that if we get our act together now, I could really and truly retire long before I'm 65. Neither has my husband. I'm 42 and he's nearly 47 - and when I asked him at what age he wanted to retire, he just said he didn't want to work until he was 65. I've been trying for the last two months to squeeze a bit more information out of him than that but with no luck so far.

We need a plan of action and I'm not yet sure what to do. I can't get much help by talking with friends as they've all got kids who are costing them rather more than they thought, so they're not in a position to even think about retiring yet. We don't have that, er, joy so it's a bit difficult for us to talk to them about our dilemma. When do we do it? How do we do it? More importantly, what on earth are we going to do with ourselves all day if we don't have to work!

Have you thought about it? What are you going to do when your kids grow up? Will you want to live in the house you're living in? Could you down-shift to a smaller one or move somewhere cheaper and use the equity to supplement your retirement income? I can't imagine doing so at the moment – but it sure makes you think about the possibilities, doesn't it?

What do you want to do? Let us know by voting in this poll.

More: Releasing Cash From Your Home | Property-Based Retirement Scheme