The research revealed 12.9 million people expect to use their property to fund part of their retirement, with 1.8 million people admitting they will rely on it to make up over 50 per cent of their retirement income.
Ali Crossley, director of lifetime mortgages at Prudential UK, said the decision to base pensions on property was a good fiscal move. She said: “Property can form a great part of a retirement planning portfolio. It may be too late for people approaching retirement to build up a supplementary source of income using a pension or investments. However the equity in their homes could be instrumental in boosting their funds.”
The joint Prudential and Datamonitor research went on to reveal a number of people would consider downsizing their property to boost their pension portfolio. However, with 74 per cent of people admitting they would only leave their property if they had to, 10 per cent said they would look into the equity release sector.
Alan Lakey, senior partner at Highclere Financial Services was unsurprised. He said: “There’s a general distrust of pensions at the moment, and in recent years, as stocks and pensions have come under scrutiny, the only constant was the rise in property prices.”
A third of people questioned believed a figure between £12,000 and £20,000 per year is sufficient to live comfortably in retirement. However Prudential indicated that, taking into account current annuity rates, to purchase an annuity to give an annual income of £17,000 requires a pension pot of almost £350,000 – a stark contrast to the actual average personal pension pot of £25,000.
