Younger people are far more reliant on property as a means to fund future retirement, when compared to older generations, according to a new survey.
The research, by Canada Life found that one in 10, 9 per cent, of those aged 16 to 54 expect housing equity to be their main source of income in retirement.
However, just 3 per cent of those aged 55 or over plan to use property wealth to fund their old age.
Canada Life’s head of marketing and communications Alice Watson says this survey reflects the reality that those under 50 are likely to receive less generous pensions than older age groups.
She adds: “The research also illustrates the evolving profile of retirement income, and lends further weight to the argument that equity release is moving into mainstream financial planning.”
In recent years sales of equity release products have boomed, as many retired people look to unlock the value of their homes.
Figures from the Equity Release Council show £1.18bn was released via these products in the first quarter of this year, up from £1.03bn in the first quarter of 2018.
However, while some of the money released is used to fund retirement, the most popular use remains for home and garden improvements.
Data from Key – an equity release advisers – show customers released an average of £75,032 during this quarter. Six out of 10 equity release customers said they would use some, or all, of these funds for home and garden improvements.
Meanwhile, 35 per cent of customer said they would use fund to pay off credit card and loan debts. Around one in three, 31 per cent, use funds to pay for holidays.
Key’s report found a further 28 per cent used of customers used some or all of these funds to pay off outstanding mortgage balances in the first three months of 2019.
Watson adds: “With more consumers open to using their property wealth in the future, it is crucial that there is also a growth in advisers.
“That is why we have organised a series of workshops designed to help advisers either become equity release qualified, or to make the most of their existing qualifications.”