Property is not a substitute for pensions for the vast majority of the population, according to a research paper by the Pensions Policy Institute.
Only 10 per cent of UK homes are worth more than £330,000, the level needed for equity release to provide an income of £100 a week, says the report.
The PPI research claims that today's average levels of pension savings – at around 7-8 per cent of salary – will only be enough to fund a two-thirds of final-salary retirement income for a 40-year old person if he or she can release equity from an average-value house and retire at 67.
The report shows that more money is invested in housing than in pensions, with £1,900bn net housing wealth in residential property compared with £1,120bn held in pension assets.
The average house price now stands at £159,000, the median house price is £132,000 and a quarter of all houses are worth less than £85,000. The PPL says this data, combined with the fact that equity release cannot release the full value of a property, means that most people will be unable to rely on their property for their retirement.
Director Alison O'Connell says: “For most people, property will be at best a complement to occupational or personal pensions, not a substitute.”
Scottish Equitable pensions development director Stewart Ritchie says: “For the vast majority of people, to say their property is their pension is a huge exaggeration. Unless you are wealthy to start with, you are not likely to go very far in retirement from your home.”