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Property classed as pension for millions

August 12, 2009 by admin  
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According to the results of recent research there are millions of homeowners in Britain who are relying on their properties to provide them with income with which to retire.

Millions of people are relying solely on their property by way of a retirement fund even though the property market has been in a slump over the past couple of years, and this is something that is causing concerns for many industry officials.

Officials have said that many Brits have put too much faith into property despite the fact that have plummeted since the peak of the housing market back in 2007. It is thought that around five million Brits are still relying on their property to provide them with funds in their retirement, and because they are relying solely on their bricks and mortar to get them through they have failed to set up any other pension fund.

The research was carried out by the agency Foster Denevo, and the results showed that around 36 percent of working adults in Britain still had no personal or works pension in place. An official from the agency said: ‘With lower house prices, people who rely on the equity in their property may find themselves having to massively downgrade in order to have sufficient funds to support their retirement.’

Another independent financial expert stated: ‘Relying on property to fund a pension, can and has worked in the past but it is a very high risk strategy. At the very least you should save in some sort of pension plan too.’

One official said: ‘The problem is that using a property as a means to fund retirement leaves you relying on the health of the property market, which can be very cyclical. Also if something goes wrong with the property, both home and retirement income are affected. Faced with a depressed property value an individual either has to carry on working, or accept a much reduced income in retirement.’

Tags: Business and Economy, pensions, housing marketus, adults, sufficient funds, property prices, personal finance, expert

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