Could your home prop up your pension?

Property is likely to be your most valuable asset. How can you make your home work harder for you?

If your pension isn’t going as far as you’d like and you want to find money above and beyond, your home may offer the helping hand you need. You could try

• Taking in a lodger

• Hosting guests with Airbnb

• Decluttering to cash in your unwanted goods​​

• Downsizing

• Getting a cash lump sum with an equity release plan

Taking in a lodger

Renting a spare room to a lodger could be a great way to earn extra cash on an ongoing basis. The government offers lots of information to help you make sure you’re doing everything by the book – and taking advantage of any benefits, such as the £7,500 tax-free allowance.

Naturally, there is some work involved. You’ll need to make sure the room is suitable and your property is safe and in good repair. But if you don’t mind the idea of inviting someone else into your home, this could be a good source of income.
 

Become a host on Airbnb

If you’re happy to take in guests but don’t want a permanent resident, Airbnb might be the answer. This hugely popular and successful website lets you rent out anything from a room to a whole house on your terms. There’s lots of help there for potential hosts so explore the site at your leisure.

People look for accommodation all over the country for a range of different reasons, Airbnb is definitely not just for hosts who live in novel homes or near tourist centres.

Declutter and cash in

If you’ve been in your home for some time, the chances are you’ve accumulated clutter over the years. Some of it you’ll love dearly, some may just be taking up space. Getting shot of the latter will not only give you your space back, it might bring in some welcome cash too.

• Clothes are just one category that sells well on eBay, so long as they’re in good condition – particularly if they’re from a popular or desirable brand. Other items that do well include old comic books, Lego, bicycles, furniture and technology, and can be sold at set prices or at auction.

• Vinyl records can also be sold on Discogs. Make sure you grade them properly.

If you’re selling online, however, it’s worth doing your homework. Search the site you use to see what similar items are priced at or have previously sold for. Then price your items realistically and remember to consider the postage and packaging costs. There are all sorts on online resources to help you get the best prices for your goods.

• Many books, DVDs and CDs aren’t worth a lot individually but combined they might make a nice lump sum. Websites such as Ziffit, WeBuyBooks and musicMagpie take all of these – as long as they’re in saleable condition and are easy to use. If you’d rather sell on the high street then consider shops such as CEX, which buy used media and tech.

• If you think you have antique items or real rarities in the house, it could be worth getting them professionally valued. With that information you can then decide whether to sell them at auction, look for a private collector, or keep them.

​Downsizing

You could also consider moving into a cheaper property: usually this will mean downsizing into a smaller home, although it could also mean moving to a cheaper area. This can be an effective way of freeing up some of the equity from your home, and could also allow you to reduce the running costs of your home. Do consider the emotional costs associated with leaving your home, as well as the upheaval which it could cause - moving is often a stressful process. 
 

Take out an equity release plan

Most long-term homeowners will have built up equity in their homes. If you’re one of them and between 55 and 95, you may be able to take out an equity release plan. The most common type is a lifetime mortgage, which is a loan secured against your home.

An equity release provider will lend you the money. Typically, you won’t make monthly repayments, as the loan plus roll-up interest is repaid when the plan comes to an end. This is usually when the property is sold after your death or a move into long-term care.
 

You can learn more about lifetime mortgages here. Be aware that taking equity release will reduce the value of your estate and may affect your entitlement to means-tested benefits. Additionally, you won’t necessarily be able to combine equity release with other options on this list. Taking a lodger, for instance, could make your home ineligible. If you’re considering equity release, read ‘is it right for you?’ carefully.