Times are changing

The vision of heading into retirement with a healthy pension and happily doing all the travels and extreme sports you never quite got round to in your working life, is on shaky ground these days. With more people living for the moment, saving for a deposit on a first property is enough to make people’s blood pressure head skywards, let alone factoring in the word ‘pension’. Yet, these two things seem to be ever-more interlinked, as people continuously see the housing boom as the route to a prosperous retirement. However, warnings are beginning to appear as research suggests one in 10 people are relying on borrowing against their property as a substitute for pension planning. The study shows that in order to secure a pension of £20,000 from a family home at the age of 65, the property would have to be worth in excess of £1 million at today’s prices. Just an estimated 89,000 properties are worth over £1 million. In addition, the Office of National Statistics (ONS) shows the UK Household saving ratio in Q1 2007 has fallen to just 2.1 per cent, the lowest level since 1960 and the austerity of post-war Britain. The ONS statistics also revealed that the number of employees paying into private sector pension schemes has sunk from 5.7 million in 2000 to 4.4 million last year.