How much money will downsizing actually release?

The sum, in one line

What you sell for, minus any mortgage left, minus what you buy for, minus the costs of moving, equals what lands in the bank. The costs are the bit people forget, and they are not small.

So the £150,000 "gap" becomes about £128,000 in the bank. Still a lot of money, but a different number, and the one to plan with. Put your own figures into the money released calculator; it uses the same method.

What changes the number most

• The price of the new home. Obvious, but the biggest lever by far. A £280,000 home instead of £300,000 adds £20,000 to the pot and takes £1,000 off the stamp duty.
• The agent's fee. 1% instead of 1.5% on a £450,000 sale saves £2,700 including VAT. Fees are negotiable, especially on a home that will sell easily. Online agents charge a fixed fee of a few hundred to a couple of thousand pounds but you do more of the work.
• Stamp duty. Nothing on the first £125,000 in England and Northern Ireland, 2% to £250,000, then 5%. Scotland and Wales have different bands. Buy before you sell and you pay a surcharge, refundable later. Stamp duty when downsizing.
• The mortgage. Any balance left comes straight off the top, and there may be an early repayment charge if you are inside a fixed deal. Ask the lender for a redemption figure.
• The new home's condition. A "needs updating" bungalow at a low price can eat £30,000 in a new kitchen, bathroom and heating before it is comfortable. Get a survey and price the work before you offer.

Three things to think about before you spend it

1. How much do you need to keep for yourselves?

Most people underestimate this. A rule of thumb from later-life advisers: keep enough that, together with your pensions, you could pay for care at home or in a home for a few years without selling anything else. In much of the UK that means keeping £50,000 to £100,000 accessible. Care costs explains the means test.

2. What does cash in the bank do to your benefits?

Nothing to the State Pension. But Pension Credit starts to reduce once savings pass £10,000, council tax support usually stops at £16,000, and the care means test bites at £23,250 in England. If you receive any of these now, check before you complete. Benefits guide.

3. Gift, invest, spend or keep?

Gifts to family are the most common use, and there is a right way to do them. Gifting a deposit. For money you keep, a later-life financial adviser can help you decide how much to hold as cash, in ISAs and in investments, and what it means for inheritance tax. Inheritance tax. The how long will it last calculator shows what drawing on it each month would do.

A note on the numbers. Tax thresholds, benefit limits and typical costs are correct as far as we know at the time of writing (2026) and, unless we say otherwise, are for England. Scotland, Wales and Northern Ireland differ in places. Rules change and your circumstances matter. This is information, not advice: check the current position and talk to a solicitor, an FCA-authorised adviser or a tax professional before you act.