Around 3.2m people are relying on property to fund their retirement while 33 per cent of UK adults are not making any provision for their retirement says Baring Asset Management.
Research from Barings shows that 7 per cent of UK adults are relying on property investments to fund their retirement which Barings says leaves them “dangerously exposed” to fluctuations in the UK property market.
Ten per cent of 35 to 44 year olds are planning on retiring with the income they receive from property assets, compared with 8 per cent of 45-54 year olds and 6 per cent of 25-34 year olds.
A further 15m people are not currently making any provision for their retirement, with young people in particular failing to think about their financial future – as one in three 25-34 year olds do not have any kind of pension plan in place.
Almost one in four 35-54 year olds is not making any provision for their retirement and 22 per cent of over 55 year olds also do not have a pension in place for their imminent retirement.
Barings’ research also reveals a huge gender divide in terms of pension provision, with 38 per cent of women not having a pension, compared with 27 per cent of men.
Barings’ CIO, Marino Valensise, is urging people to plan more carefully for their retirement: “Too many people are relying on property to fund their retirement. It’s crucial that we plan for our old age and that our investments are diversified amongst a number of different asset classes – not just property.
“The UK has seen an incredible increase in wealth in the last 20 years, fuelled, in part, by rising house prices in both nominal (gross of inflation) and real (net of inflation) terms; one factor has been the easier access to borrowing. It is highly unlikely that, during the next decades, we would experience similar levels of property price increases, especially in real terms. The events of the summer are already beginning to feed through to the average UK consumer in the form of higher borrowing costs based on more stringent lending criteria. This is likely to have an impact on the property market.”