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House Price Falls Wipe £29bn Off Retirement Funds

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House price falls wipe £29bn off retirement funds

Falling house prices have wiped a staggering £29bn off the value of the retirement funds of almost three million working Brits who are relying on their property to fund their retirement.

Overall, 2.8 million Brits are relying on property to fund their pension, according to Baring Asset Management.

However, 700,000 of those are aged between 55 and 64, and a further 200,000 are aged 65 or over, leaving them little or no time to build up extra capital to help fund their retirement.

Relying on property to fund retirement is particularly prevalent in the East Midlands, where 11 per cent of people fall into this category.

Comparatively, Londoners are the least likely to take this approach, with just 5 per cent opting for this route.

Yet, despite the impact of the recession and recent house price falls, 74 per cent, or 7.9 million, of those relying on property to fund part, or all, of their retirement have made no changes to their pension in the past year.

Only 4 per cent (433,000) have started to make alternative pension arrangements and are looking at other investment opportunities.

Marino Valensise, chief investment officer at Barings, said: "During the long house price boom it was convenient to view your home or other property as your pension pot but recent events have exposed the risk of this approach.

"Sadly, those approaching or at retirement age have little or no time to rebuild their savings and are paying the price."

Valensise said: "What’s really alarming is that so many people have not changed their retirement plans despite what’s happened to house prices.

"Saving for retirement should start as early as possible and involve a well planned approach that controls risk through spreading investments across several asset classes.

"Apart from the tax efficient benefits of a pension plan, putting all your retirement eggs in the property basket is hopelessly optimistic."

Well, it was inevitable. Looks like people might actually have to SELL their 'pension property' in order to eat, and take the tax hit, and pay the fee's, etc...

This is only the beginning.

Chickens coming home to roost?

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trouble is, what's a better alternative? Put your trust in some wide-boy pension scheme that could evaporate overnight? Go with a Big Player to be told your pension pot is worth less than half what you have paid in over the last 20 years? Rely on the gumment, who happily take National Insurance off you only to declare you can fvck off, work 'till you drop?

I don't blame people for trying to look after themselves.... nobody else will. And I don't believe that most BTL'ers were in it just for pensions.... many were in it so they didn't have to work....

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