Record number of British people rely on property to fund retirement
A record 13% of British people plan to rent or sell property to fund their retirement, up from 11% last year, according to research from investment management firm Baring Asset Management.
August 13, 2013
Five million homeowners would rather put their faith in property values than annuity, according to the research published this week.
Annuity rates, which determine how much a pension pays, are at an all-time low. The low rates have been caused by quantitative easing, low interest rates caused by the Government’s Funding for Lending Scheme and longer life expectancy.
Ros Altmann, formerly a pensions adviser under Tony Blair, told the Daily Mail that pensioners would have to wait until the age of 90 before their annuity became ‘good value’.
She also said that pensioners who buy annuities at 65 will not get their money back unless they live until the age of 82. ‘Far from being a low-risk purchase, buying an annuity could be the biggest gamble you ever take in your life,’ she added.
The report comes at the same time as comments from The Royal Institution of Chartered Surveyors, which announced today that the UK’s recovering property industry is being boosted by Help to Buy and funding for lending.