Britons relying on their property to fund their retirements been urged to make separate arrangements and warned their plans are 'hopelessly optimistic'.
Almost three million working people in the UK – eight per cent of the population – currently view their property as a means to fund their lifestyle in retirement, research from Baring Asset Management has found.
Of the 2.8 million, 700,000 are aged between 55 and 64, with a further 200,000 aged 65 and over, meaning they have little time to build up additional funds.
Falls in the housing market over the last couple of years have illustrated the precarious nature of viewing property as the predominant source of income after finishing work.
In fact, contractions in the mortgage sector have wiped approximately £29 billion off the value of pension pots in the last year alone. In spite of this, three quarters of those relying on property have made no changes to their pension in the past 12 months.
Just four per cent have made firm alternative pension arrangements and are looking at other investment options available to them.
"During the long house price boom, it was convenient to view your home or other property as your pension pot but recent events have exposed the risk of this approach," Marino Valensise, Chief Investment Officer at Barings, commented.
"What's really alarming is that so many people have not changed their retirement plans despite what's happened to house prices. Saving for retirement should start as early as possible and involve a well planned approach that controls risk through spreading investments across several asset classes.
"Apart from the tax efficient benefits of a pension plan, putting all your retirement eggs in the property basket is hopelessly optimistic."
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