New approaches to an old-age problem
An increasing number of Brits expect property, cash and even inheritance to fund their retirement as 15.7m people turn their back on traditional pensions.
Despite a troubled market, more than one in 10 people expect property to pay for their later years, according to Baring Asset Management, and the number of people saying that cash will form part of their retirement planning increased from 26 per cent in the last survey in 2011 to 29 per cent (around 10.5 million people) this time. Worryingly, 17 per cent, or 6 million in the UK, said they expect inheritance to help fund their retirement, despite the average UK inheritance estimated at just £45,000 per person and the cost of long-term care increasingly over recent years.
"It is very surprising to see just how varied retirement funding sources have become for many people in the UK," says Marino Valensise, chief investment officer at Barings. "While diversification is crucial to best-practice asset management, the suitability of some of these sources can be questioned, such as a reliance on inheritance. Overall, the most challenging finding is that nearly half of the adult UK population admit to not having a formal pension at all."
The study found that one in four, or 8.8m people, admit they simply don't know how they will fund their retirement.
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