Apart from your income, your home is probably your biggest asset.

You will spend thousands on improvements and mortgage payments to eventually make it yours. But can your home replace the need for a pension?

If you own a property and pay off your mortgage, it’s easy to see this as your nest egg in old age, rather than directing your remaining disposable income to pay monthly into a pension. After all, house prices have generally risen over the past few decades. Many plan to sell their home, move somewhere smaller and live off the equity from that sale in retirement.

As simple as that sounds, we don’t think your home can ever really replace your pension. A pension can provide you with a steady income, while your home may not. Your home’s value may fall as well as rise, so it’s not always sensible to rely upon it.

Your circumstances can change; you may need to re-mortgage in the future to pay for a child’s university fees or split the property in the event of a divorce.

Pensions also have the benefit of being one of the most tax efficient savings options; for every €100 put into a pension by a top rate taxpayer, the Government will contribute €40.

However, there are options available to people who do want to use their house to supplement their pension or retirement income.

Under the Rent-a-room scheme, you can let rooms in your home for residential accommodation and receive up to €14,000 per year, exempt from income tax.

It is important to remember there will be work involved; you’re responsible for the upkeep, as well as for agreeing rent. You’ll also be sharing parts of your home with somebody new, which may take some adjustment.

Downsizing – involves moving to a smaller home or a home in a cheaper area, leaving you with some spare money to help make life more comfortable and reduced ongoing costs on upkeep and maintenance.

The biggest downside is you’ll have to leave your home, and any emotional connection you have with it. It’s not always practical to move, and there can be quite a few upfront costs.