According to research from Alliance Trust, this year only 33 per cent of people believed their property would be a top contributor to their final retirement pot. This is down from 43 per cent last year, and only up 2 per cent from 2006. While property was the top contributor in 2007, it moved down to second place this year.
Faith in the company pension increased from 36 per cent to 40 per cent this year, rising back to the same levels as in 2006. The personal pension continued to be increasingly relied upon, steadily growing from 26 per cent in 2006, to 28 per cent in 2007 and now reaching 31 per cent in 2008. It also showed that more people were hoping for an inheritance or windfall, with 21 per cent this year holding out for one of these to boost their pension pot.
Steve Latto, Pensions Development Manager at Alliance Trust, said: "While property prices have been growing rapidly over recent years, the onset of the credit crunch has had noticeable effects on the housing market. This no doubt has led to many people re-assessing their pension provisions. It is not surprising that faith in property has fallen already this year and may decline further because of the exceptional financial crisis we are living through and the likelihood that we are heading for recession.
The economic changes we have experienced over the past year clearly highlight the importance of careful planning for retirement as well as diversification as a way of offsetting the risks inherent in all kinds of investments. People often don't appreciate there are many different ways to save for their retirement and they should be prepared to re-assess their investments as circumstances change. ISAs, for instance, can be a good way to start, and can be transferred into a pension fund later in life. The most important thing is to investigate the best way to start saving as early as possible and pay attention to your spread of investments so as to help build a pension pot when it comes to retirement age."
