Is property a sound investment for retirement?
Consumer research carried out by Baring Asset Management has reported an increased number of home owners within the UK will be using property to fund their retirement.
In the 2014 report, around 2.5 million non-retired people, or 7% of those surveyed, say they plan to use the assets from their main home for their retirement — an increase of 2% since last year.
Rod Aldridge, Head of UK Wholesale Distribution at Barings, is concerned that more consumers are using property as an investment for retirement.
"The level of risk involved in expecting to fund your retirement through the use of a volatile asset such as their own home or from other properties such as buy-to-let should be fully appreciated and understood. 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."
The number of those who are planning on selling or downsizing a property to help during retirement has increased two-fold — from 2% in 2012, to 4% in the latest survey.
A staggering amount of respondents are also considering renting out or selling properties to fund their retirement — almost 6 million people (16%), which is an increase of 3% from last year and the highest figure since 2009.
A third of those who had previously planned to sell or let property to help with retirement, have maintained these plans for the future.
From those surveyed, around 1.3 million (3%) have plans to rent out secondary properties for retirement purposes.
Despite the increased investment in property as a retirement source, the number of people who say they are not planning to invest in this way rose from 35% in 2013, to 52% in the 2014 survey.
Aldridge advises having a range of investments is the most stable way to fund retirement, commenting, "It is imperative that people diversify their investments through a range of assets which can, of course, include property."