25 October 2006
More than 7.6 million people are banking on their houses to help
fund their retirement ahead of other long-term savings, research
from Lincoln Financial Group shows.
The research found that 51 per cent of homeowners regard their
home as their major asset for providing for retirement after their
pension, while 36 per cent say they have other assets. The figure
rises to 57 per cent for those nearer to retirement in the 55 to 64
age group.
Ian Noble, head of strategic partnerships at Lincoln Financial
Group commented: "We all know the phrase "safe as houses" but it
appears many of us are perhaps taking it a bit too literally by
relying on our homes to fund our retirement after our pensions.
"Of course it can be difficult building up other savings while
paying off your mortgage and also investing in a pension. But it is
potentially risky to believe that your home will provide for your
retirement if your pension is not sufficient.
"There are issues to consider when using equity from your home
to pay for your retirement such as having to move house to a
smaller home and possibly moving away from an area you are familiar
with. Many will not want the upheaval.
"Similarly there are technical issues such as planning for
inheritance tax and how to invest any equity you do release from
your home. It can therefore make sense to build up savings while
you are working and possibly to defer clearing your mortgage.
"Whatever the case we would urge everyone to seek advice from
independent financial advisers on planning for retirement and to
think through their saving and investment plans. You will with a
bit of luck be a long time retired so it makes sense to plan."
