How ‘retirement-maxing’ could free up enough cash to help you live a luxurious lifestyle: Meet the pensioners who made it work for them
As we live longer and stay active later in life, for many people, retirement is a time for slowing down as well as new adventures. Road trips, long-distance excursions, and even skydiving are often among older people’s bucket list plans.
And a growing number of retirees are opting to ‘maximum retirement’ before their golden years: they make proactive decisions to create the lifestyle they want, whether it’s to travel the world, live new experiences or gift money to their children.
Data shows that many more retirees are downsizing to save money rather than taking side hustles, said Aneisha Beveridge, head of research for the Hamptons. ‘Rising cost of living and higher mortgage rates are also likely to impact this situation; “especially when rates rise again,” he adds.
With mortgage interest rates currently above 5 per cent and inflation driving up the cost of living, figures released by Pensions UK earlier this month showed that the price you pay for a ‘moderate’ lifestyle, excluding housing costs, equates to around £32,700 a year for a pensioner, or £45,400 for a ‘comfortable’ person.
Steve Bangs, chief executive of Pegasus Homes, a chain of later living communities, says the fact that many retirees are taking a ‘less is more’ approach to their housing and looking for a small, lockable flat is also directly related to ‘different generational values, tax policy changes – particularly Inheritance Tax (IHT)’.
Currently, the maximum total tax-free allowance that a married couple can transfer without triggering IHT is £1 million, and the equity distribution to your family must be made seven years before death to be free of IHT.
However, as of April 6, 2027, unused retirement funds will be withdrawn to IHT.
‘People are realizing that expensive house living will trigger IHT later on,’ says Honor Barratt, managing director of Birchgrove, a provider of later living rental housing.
‘Renting in retirement and distributing the funds to their children is one way to get their money below the £1 million threshold,’ he adds.
According to the British Housing Survey, the proportion of private tenants aged over 65 has increased by a third since 2009 and this increase is predicted to increase.
Angela Benns, 79, decided to rent as a flexible option after her husband was diagnosed with dementia
Phil Laybourne, who sold his three-bedroom house in Buckinghamshire for £799,000, now lives in a one-bedroom flat in Pegasus’ Wooburn Bales development
Angela Benns, 79, decided to rent as a flexible option after her husband was diagnosed with dementia. They moved from the four-bedroom family home in Camberley, Surrey, to a two-bedroom flat at Birchgrove’s Woodbank Apartments in Woking. Prices start from £999 per week.
‘This was a largely hassle-free option and I was able to give my three daughters their inheritances early; This is a good thing because I see the benefits.’
He gave his daughters £200,000 each to cover the purchase of a house, divorce and mortgage payments. ‘It will take me below the £1 million IHT threshold.’
Although her husband has since passed away, she loves the security and community of the site, which has its wellness facilities and bar, especially the greenhouse on the grounds.
‘There’s a core of proactive people here and we go to the local pub for lunch and have started an informal night in the pub every fortnight.’
As he enjoys life in a Thursday Murder Club-style community, he enjoys the freedom of knowing he is not tied to a property, but he won’t be kicked out either, with the recent Tenants’ Bill of Rights providing added reassurance.
Prices start from £375,000 for the Vincent project, next to Pegasus’ projects in Bristol
For retired printer Phil Laybourne, downsizing two years ago ushered in a whole new era of Antipodean travel and allowed him to upgrade his equipment for his wildlife photography hobby.
After selling her three-bedroom detached bungalow in Buckinghamshire for £799,000, she now lives in a one-bedroom flat in the Wooburn Bales development near Pegasus, which costs £425,000, resulting in ‘a nice sum in the bank and a nice lifestyle’.
‘I didn’t know what to do after losing my wife and then my new partner suddenly,’ says Phil, 66, who retired at 60. I had seen the ‘Wooburn Bales’ being built and liked the idea of locking in and leaving.
‘I was a little skeptical at first as everyone was old, but there’s a nice crowd and I can have dinner with my neighbors on a Friday night if I want.’
With one of her daughters, Grace, living nearby, she can now visit her eldest daughter, Steph, in Australia every year without worrying about leaving a house empty for three months and paying Band G council tax for it. He loves the secure parking at his new property.
‘I will go [to Perth] Travel around every winter and try New Zealand too. ‘I live for today.’
Lynda Cant also opted for ‘maximum retirement’; But the girls’ trips to Amsterdam and Brussels are more important than her purse.
She ‘needed a new chapter’ following the death of her beloved husband from cancer in 2024 and decided to sell her detached four-bedroom family home near Basingstoke in exchange for a flat next to the downs in Bristol in Pegasus’ The Vincent development (prices start from £375,000).
‘One of my daughters lives in Bristol and I had been to The Vincent restaurant and loved the idea of being part of a new community,’ says Lynda, a dynamic 79-year-old former HR director, company owner and RTT therapist, a discipline that blends traditional psychotherapy with other modalities such as hypnotherapy and cognitive behavioral therapy.
She makes the most of the cafes and restaurants on nearby Whiteladies Road, as well as going on many 50th birthday trips with her old girl gang in Hampshire. She is booked to go on a cruise later this year and enjoys volunteering as a career coach every week for women’s charity Smart Works.
Having a healthy-sized pension means your annual wage of £7,637 Maintaining the gym, spa and club room for book groups and movie nights.
‘I would never move here with my husband, but without the responsibility of looking after a large property, I could enjoy being a city girl again,’ says Lynda. A proud Londoner, she’s already planning ‘Lynfest’ – a big, spectacular party with a live band – for her 80th birthday in August. ‘I feel revitalized, I live for each day.’
