It's certainly true that retirement lifestyles can be funded by all savings and wealth and not just a pension, but this research is a salient reminder that the vast majority of home owners don't want their home to be part of that funding.
Property as an investment can be looked at in a number of ways: your home can appreciate and so can help you to build capital but this can only be realised if you sell it. Property can also be bought to rent out, so providing income and potentially a return on capital if the property increases in value.
For a majority of people their home represents the single most significant part of their total wealth. So investing in property on top of that is something to be carefully considered as this imbalance in one particular asset class introduces more investment risk and a poorly diversified investment portfolio.
For those people who have significant pension savings and who are limited either to a maximum of £10,000 annual pension tax allowance, or nil if they have already reached their lifetime pension tax allowance, then property investment may be an alternative they wish to consider.
But, it is not the only choice; there are other assets classes to consider such as deposits, gilts, bonds, stocks, funds and alternatives. Each, including property, have pros and cons: on their own merits; when looking at them as a replacement investment for a pension; and in their suitability to each individual's retirement plan in line with their own circumstances, needs and attitude to risk.
For those looking to invest property in addition to their own home, it is vital to talk through this with a financial adviser to see if this really is the best way to use your capital and to understand the benefits and risks involved.
Aegon research highlights that the vast majority of homeowners don’t want to use their property as funding New research by Aegon finds that 74% of homeowners would only use their home as a last resort to provide a retirement income or don’t consider their home as a source of retirement income at all. Only 4% of homeowners consider their home as their main source of retirement income. Additionally, just over half of homeowners (53%) want to leave their home to their loved ones. The current ‘bank of mum and dad’ culture is apparent in retirement planning, with 21% of homeowners hoping an inheritance will help fund their retirement. As a result, selling your house and moving in with family to make ends meet in retirement is very unpopular (3%) even more than moving into a retirement home (5%).