Downsizing your home is a big decision that requires plenty of thought and planning. A large home and garden is wonderful for raising a family but it may not be the right place for you once the kids have flown the nest. Downsizing is often a very attractive proposition but there are personal and financial implications to consider. Let’s have a look at the pros and cons you should think about before you make a decision as well as some dos and don’ts once you’ve decided to make the move.

The Pros

1. Retirement Funds Boost

Selling a larger house for a smaller one will provide you with a significant cash sum. Your retirement pot will receive a very welcome boost, which with careful management may, along with any existing savings and the state pension, be enough to support a long and happy retirement.

2. Lower Expenses

Downsizing undoubtedly cuts household expenses. You can expect lower utility bills, a reduced local property tax, lower insurance, cleaning, maintenance and gardening costs, and, if you also downsize your mortgage, lower loan repayments.

3. Easier Living

Saying goodbye to the demands of maintaining a large property can be liberating. It’s also a great opportunity to declutter. A smaller place requires less upkeep, giving you more time to get out there and enjoy the better things in life.

The Cons

1. Emotional Ties

You will most likely have an emotional attachment to your home. So many family experiences and memories are anchored in bricks and mortar. Plus, having space for visiting kids (and grandkids) may be important to you.

2. Greener Grass?

Yes the grass can be greener on the other side but not necessarily. You know (and love?) your neighbourhood so there is an element of risk in upping sticks and moving on.

3. Hidden Costs

Like most financial transactions there will be unforeseen and hidden costs. There will of course be estate agent fees and stamp duty to pay, and without the use of a trusted financial advisor, investing your ‘downsize dividend’ can be daunting. Nevertheless, your lower living expenses and increased investment returns should, over time, more than offset these costs.

Do …

1. Start The Process Early

We’re talking about a major life event so the more preparation and planning, the better. Getting to grips with the figures and researching the property market takes time. And don’t leave it too late in another sense – you might want to enjoy that boost to your finances while you still have the energy to do so.

2. Seek Financial Advice

Downsizing comes in two parts. First – the sale of your home for a smaller one. Second – the careful investment of your extra cash. I would strongly recommend you seek the advice of an independent financial planner so that the strategy for both parts of this transaction makes complete sense.

3. Research Your Market

Moving home is never easy. Try to get to know your new neighbourhood (and house) in advance so that you pay the right price for your new home and ensure there are no unpleasant surprises when you move in.

Don’t …

1. Buy Before You Sell

Buying your new home before you sell your current one will just create a whole load of unnecessary stress. You may end up needing (expensive) finance to bridge the time gap or selling other assets to create liquidity. It’s just not worth the hassle.

2. Tell Nobody

Any major life decision should be approached with as much family and friends support as possible, and the downsize decision is no exception. Make sure all your family are consulted in advance, regardless of how much you want to let them influence your decision.

3. Be Afraid To Change Your Mind

Don’t discount the option of staying put. Downsizing is almost always a good financial decision but personal circumstances should also play a big role in your thought process. You are allowed to change your mind!

And Some Possible Non-Sale Options (in brief) …

If you want a little extra cash (and company) … Rent a Room or Air BnB

If you want lots of cash … Equity Release (Lifetime Loan)

If you just want a smaller place … Let your home and buy or rent a smaller place for yourself

If you want to stay in the neighbourhood … Sell or rent your home and build a ‘granny flat’ in the garden

If you want to keep it in the family (1) … Swap homes with one of your children

If you want to keep it in the family (2) … Ask one of your children to move back in


For investment advice call Money Smart on 01 276 0006 or email


And if you like this article, try this one: What is Equity Release?