UK - Younger workers are risking their retirements by using their homes as their pension fund, a new report claims.
Research commissioned by insurance giant Prudential shows that around 55% of people aged from 25-34 believe that cashing in on rising house prices is more productive than opting for traditional pension planning.
The report – written by Bristol Business School professor Merlin Stone – claims too many people are risking their retirements by using their homes as a sole pension fund.
Stone said: “This is a high risk strategy that could easily backfire and leave many facing financial hardship and poverty in later life.”
NAPF technical manager of benefits Teresa Turner said that while she had no hard evidence of the shift to property, it did seem to be a “worrying trend”.
She added: “Putting everything in property and hoping this will see you through retirement is reactionary and short-sighted.
“Just because the housing market is doing well at the moment does not mean it will not crash in the same way as the stock market and savings will be lost.”
Conservative pensions spokesman David Willetts blamed the government for “failing people” who expected a decent income in retirement and for the closure of pension schemes.
He added: “While high property values may lead people to think that they can cash in to get a better income, this route carries significant risk.”
A mix of savings, pensions, cash deposits and property was seen as the best approach to retirement planning.
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