Pensioners are richer than they think - but your prospects in retirement are increasingly a postcode lottery. New figures have revealed that retired homeowners in London are sitting on a small fortune in home equity, and that their wealth is increasing by thousands of pounds a month. Meanwhile, those in the Midlands and North-West are seeing their housing wealth fall.

So just where do you stand?

Rising values

The figures, from equity release firm Key Retirement Solutions, revealed that overall British pensioners own a startling £756.7 billion in property. Small rises in the value of their homes mean that the over 65s saw the value of their property rise a collective £13.66 billion in the last three months - which works out as a gain of £2,956 each.

However, these rises have not been uniform. Those in London, Scotland and Wales saw substantial increases. In London the average pensioner saw their property price rise £15,954 over the three months, while in Scotland it rose £12,720, and Welsh pensioners saw rises of £5,811.

Meanwhile the over 65s in the East Midlands faced losses of £713 over the period, while the North West, the East of England, Yorkshire and Humberside and the North East also saw losses.

Dean Mirfin, group director at Key Retirement Solutions says: "It is too early to talk about a housing market recovery but pensioners have on average seen gains of £2,956 in their property equity." "Whatever happens in the housing market over-65s own considerable property wealth which represents a massive investment success as they no longer have mortgages on houses they may have bought more than 25 years ago."

Income

It seems, therefore, that wherever they lie in the country, those who opted for repayment mortgages are sitting on a great deal of wealth. Their location is likely to dictate just how huge that wealth is, but the movement of property prices in the past few decades means all pensioners are likely to have more wealth than they think.

The question, of course, is how that translates into income. This is more of a vexed question, because there's every chance that people could be living in a house worth hundreds of thousands of pounds, and still struggling to make ends meet.

Key Retirement Solutions promotes equity release plans, which are a way of converting your property into an income. However, these are worth understanding properly when you weigh them up, as they can erode a substantial chunk of the value of your property. The most common kind essentially involves taking a mortgage out on your property, and the interest which mounts up will be paid out of the proceeds of selling your home when you die.

While these plans will be right for some people they could prove an expensive mistake for others.

Options

Alternatively, older people could consider renting out a room or downsizing in order to release some of the value of their home. However, both of these options involve a lifestyle decision, and may not free up as much equity as expected unless you do your research carefully.

There are no easy answers as to how to translate assets into income. However, at least pensioners have such significant equity to start with.

Areas where over 65s are seeing properties rise in value

London £15,954
Scotland £12,720
Wales £5,811
South East £2,151
South West £2,144
West Midlands £942

Areas where property values are falling

East Midlands -£713
Yorkshire/Humberside -£296
North West -£97
East -£44
North East -£13