New Warnings Over Using Property For Pensions

Relying On Property To Fund Pension Is Not A Good Idea Warn Experts

3.5 million property owners plan to rent out, downsize or sell properties to get enough money in the bank to pay for their retirement according to a survey by an asset management specialist.

However, pension experts are warning that people could be risking poverty in retirement because of the volatile nature of the property market, especially if they were forced to sell properties as values fell.

The research, by Barings Asset Management, discovered that 16% of the UK workforce would be relying on property sales to provide them with all or some of their pension pots, an increase of 13% from 2013 and the highest reported figure since 2009.

Soaring residential property prices are the reason behind the trend. Last week the Office for National Statistics (ONS) said average UK residential property prices were up 11.7% in the year to the end of July to £272,000 (GBP).

The biggest rise was 19.1% observed in London.

The hard hitting story was first published by the Express newspaper earlier this week, with warnings from financial advisors that property investment was a dangerous game to play.