More people look to property for retirement funding
An annual survey conducted by Baring Asset Management found that one in 14 (7%) of people not yet retired are planning to sell their primary residence in order to fund their retirement.
In total, 16% of people said they are planning to rent or sell a property (not necessarily their main home) to fund retirement, up from 13% last year and the highest figure since 2009.
The trend is a source of concern for Rod Aldridge, head of UK wholesale distribution at Barings. He says: "It is worrying that the number of people relying exclusively on their property to fund retirement has increased again.
"Property can, of course, form part of a diversified investment portfolio but this year's research indicates that more people are investing in property as a retirement source and this could mean they are too concentrated in the asset class. Property prices can be volatile, so relying on your home to provide all your income to fund retirement is risky."
Aldridge adds: "Investing for your retirement is about long-term planning and as people are living longer, more emphasis needs to be put on how a lengthier retirement will be funded. It is imperative that people diversify their investments through a range of assets which can, of course, include property."
This article was written for our sister website Money Observer