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People Rely Solely on Property to Fund Retirement
This article is an external press release originally published on the Landlord News website, which has now been migrated to the Just Landlords blog.
A veteran member of an asset management company has stated that a worrying number of people are relying on their property investment to fund their retirement.
People Rely Solely on Property to Fund Retirement
Rod Aldridge of Barings Asset Management has warned that people planning on selling or renting their property to boost their pension fund are open to the trends of the ever-changing property market.
Mr Aldridge says that people must be aware of the dangers of using property to fund retirement. As a result, he has urged those planning to do so to invest in other assets that are not tied up in property.
A recent survey from Barings found that 7% of non-retirees have made plans to sell their existing property in order to boost funds for their retirement. In addition, the number of people who have plans to sell a property which does not serve as their main dwelling has increased from 13% in 2013 to 16% in 2014.[1]
Volatile
Mr Alridge said that the results of the survey were concerning. He stated: “Property can, of course, form part of a diversified investment portfolio, but this year’s research indicates that more people are investing in property as a retirement source and this could mean they are too concentrated in the asset class. Property prices can be volatile, so relying on your home to provide all your income to fund retirement is risky.”[1]
He continued: “Expecting to fund your retirement through the use of a volatile asset such as their own home or from other properties, such as buy-to-let, should be fully appreciated and understood.”
Aldridge believes: “Investing for your retirement is about long-term planning,” and “more emphasis needs to be put on how a lengthier retirement will be funded.”[1]
Despite the concern, the research from Barings found that people who have never planned to use property to boost their retirement fund rose from 35% to 52% during the past year.[1]
[1] http://www.carehome.co.uk/news/article.cfm/id/1565240/worrying-number-of-people-relying-exclusively-property-to-fund-retirement
