Is buying property the best way to save for retirement?
Date online: 14/03/2017
The data revealed that 46% of adults thought buying property would be the best way of making money for their retirement.
The ONS says that over the last 6 years, as with opinions over the safest way to save for retirement, the percentage of people identifying property as making the most of their money has been increasing, which may reflect a growing confidence in property prices since July 2010.
In contrast, the popularity of ISAs and savings accounts has been decreasing, possibly reflecting low interest rates over this period affecting people’s attitudes towards these types of investments.
In the period July 2014 to June 2016, of all adults questioned, 40% believed employer pension schemes were the safest way to save for retirement, broadly similar to 2012 to 2014 (39%), though an increase on 2010 to 2012 (35%).
46% considered that property would make the most of their money in 2014 to 2016, an increase on 2012 to 2014 when the figure was 43%.
Almost a third (32%) of those who expected occupational or personal pensions to provide income in retirement were not currently contributing to a pension with almost half of them (46%) reporting “low income, not being in work or still in education” as the reason.
Sally Merritt, head of product for Saga Investment Services, said: “It is alarming that so many people do not feel able to save for their retirement, but it seems that for some, just a little more information may be all they need to help them in to the savings habit.
The data also shows that over half of people feel that they are confident that their income in retirement will provide the standard of living they had hoped for, but this confidence could well be misplaced. Our own research shows that the majority of people do not understand how much they need in their pension pot to live even a basic life in retirement, typically underestimating by half how much income a pension pot of £244,000 would give them.
This once again shows the importance of opening up access to advice and guidance for all people about their retirement savings.”