The value of property wealth held by the over-60s is worth three times the entire defined contribution (DC) pensions market, according to Key Equity Release.

Total residential property wealth held by the over-60s is estimated at £2.92 trillion, according to Key analysis of pension figures from the Office for National Statistics and property wealth from Savills.

That is around three times than the total market value of all DC pension assets in the UK at £950 billion.

Once buy-to-let property wealth is added, over-60s property wealth rises to £3.84 trillion. 

Property wealth typically represents more than 40% of total household wealth for the over-60s but is not being made full use of in retirement planning currently, Key believes.

Around six out of 10 (59%) of over-60s currently have some DC pension assets with the median amount held estimated at £102,000 compared with average house prices of around £270,000.

However, around a quarter of over-60s have DC pension funds of less than £25,000.

DC pensions now dominate UK retirement saving with around 29 million holding them, while just 5.76 million have defined benefit pensions, including 339,000 who are still paying into them.

Key believes the lack of adequate savings into DC pensions will drive expansion for the later life lending market.

Key Equity Release chief executive Will Hale said: “The colossal switch towards DC in the UK pension landscape dramatically demonstrates why property wealth is increasingly important in retirement planning.

“Over-60s approaching retirement with modest DC pension pots need to look at all their assets and consider all options for funding their wants and needs in retirement.  Property wealth has to be part of the mix.

“With property wealth typically representing more than 40% of household wealth and the value of residential property wealth held by the over-60s massively outstripping the market value of all DC pension assets it is important that advisers and clients consider all their options.”