The baby boom generation is intending to help fund their pensions with the investments made in property, suggests a new report.
Approximately two million people aged between 50 and 60 are planning to use 50 per cent of the equity stored in their properties to supplement their pension funds, reveals research by life and pensions company Prudential and market research firm Datamonitor.
In total, people in the 50- to 60-year-old bracket currently hold about £542.6 billion in property equity and Datamonitor estimates this will increase to £1,425.4 billion in 2020 when the youngest of this generation will have retired.
The report suggests that this large amount of equity held by the post-war generation could help tackle the potential pensions crisis fast approaching.
Prudential sees this vast amount of untapped equity is the key to ensuring a more comfortable retirement for many and alleviating some of the pressure on the pensions system as a whole.
Property owners can access the value in their property by downsizing, choosing a lifetime mortgage or opting for an equity release scheme.
"Property can form a great part of a retirement planning portfolio," said Ali Crossley, Prudential UK's director of lifetime mortgages.
"It may be too late for people approaching retirement to build up a supplementary source of income using a pension, savings or investments. However the equity tied up in their homes could be instrumental in boosting their funds," she concluded.
Pensions to be boosted by baby boom property, claims research
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Pensions to be boosted by baby boom property, claims research
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