Tuesday 3 May 2016 7:19 pm

Property wealth is worth more than pension savings for more than half of over-55s

Over 55 year-olds have more wealth locked up in their property than their total pension savings combined, a new survey shows. 

The study, by high net worth adviser Bower Private Clients, found that 58 per cent of over 55 year-olds estimate that their mortgage-free home is worth more than the combined value of their and their partner’s pension savings.

Around 11 per cent of those questioned said they would prefer to use the wealth tied up in their home to help fund retirement before turning their pension fund into an income while a quarter would welcome the opportunity to be able to borrow against the value of their property.

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Over-55s in Scotland and the south east of England are the most likely to have homes worth more than their pension funds, with 63 per cent of those questioned in Scotland and 62 per cent in the south east saying their properties are worth more than their retirement savings. But that drops to 45 per cent in Wales.

The report comes after a leading think tank warned last week that the household saving ratio, the percentage of personal savings to disposable income, is forecast to fall to its lowest level in 50 years in 2016

The report from the Centre for Economics and Business Research (Cebr) found that current savings levels are expected to grow from £50.5bn in 2016 to £74.4bn in 2026, far below the 2009 peak of £104.8bn.

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Andrea Rozario, chief corporate officer at Bower Private Clients said: “The benefits of property investment are highlighted by the fact that the majority of over-55s have more wealth in their homes than their pension savings."

“Stock market volatility and historically low interest rates have had a major impact on pension and investment income since the financial crash while those who are lucky enough to have got on the property ladder have benefited.

“That means over-55s may find themselves in a position where they have the home which they love but not the income or liquid assets they need to fund their own retirement while being able to help family. Lifetime mortgages are among the solutions they should be looking at.”