He explained that with property, there’s the option to sell before the minimum pension age but for most people, their property will be their home – so to access any money they’ll have to downsize, move to a cheaper area or consider equity release.
“Equity release can be valuable for people without any other assets but its important anyone considering this takes advice to make sure it’s right for them,” he added.
Adviser view
Speaking to FT Adviser, Tom Kean, director at Thameside Financial Planning, said the world was very different now compared to a generation or two ago.
“That said, when I moved into my first home - a rather dull flat in sunny High Wycombe - my overarching feeling was that if I didn’t do it then, I would be a renter for the rest of my life and I would never own my own home,” he said.
“At the time (the late 80s) that was a fate worse than death. I had to beg borrow and steal to furnish this empty space; but it was strangely fun at the time. Then property prices crashed and interest rates went up to 15 per cent, so it seemed pretty hairy back then too.”
Kean said the survey accurately reflected the fact that final salary schemes were more common back then and that property is still a popular asset class.
“Of course, pensions have had such a long run of bad press that it is no surprise people think they’d be better off doing something else, regardless of the fact that pensions are still top dog to anyone who works out the maths, including the maths on death, which is never a nice thing to do,” he said.
Meanwhile, Lisa Meller, IFA at Personal Finance Movement, said it was interesting to see that over the generations the potential reliance on property rather than a traditional pension appears to be increasing.
“As is well known a lot of baby boomers sit on property wealth as a result of the house price increases over their lifetimes which will be passed down the generations,” she said.
“So there is an air of opportunity around property in the younger generations having seen the house price increases for their parents and grandparents despite the barriers younger generations now face when entering the property market.”
Nevertheless, Meller argued that it was important to “err on the side of caution” when viewing your home as your retirement as that often, though not always, requires downsizing.
