Two thirds of workers approaching retirement by 2030 do not have enough savings and are relying on the value locked in their homes to see them through.
They are hoping luck will sort out their finances and have no idea what to do to improve their lives, says a report from the Tax Incentivised Savings Association (TISA).
TISA also blames advisers for not taking home ownership into account when helping clients.
The group is a financial services industry think-tank and forum.
The problems of retirement savers who only have a property pension to look forward to were highlighted in a report published for TISA’s annual conference.
Optimistic and unrealistic ambitions
The report revealed many over 50s have optimistic and unrealistic ambitions for their retirement – 70% want to travel, 30% plan to give their children money and 22% planning to pay off their mortgage.
While their expectation of two-thirds final income to fund their ambitions was realistic, 75% had not looked at their retirement saving plans for several years.
Half were confident that they would have enough money in retirement., with 70% expecting non-pension savings to provide at least a fifth of their income, which is at odds with official data that shows average households have limited non-pension savings.
Another 50% were expecting to use the value of their home to boost their retirement income.
Counting on a property pension
Those expecting an income shortfall in retirement estimated they fell short of what they needed by an average £11,400 a year.
Gower Wisdom, Product Director at Old Mutual Wealth and co-author of the report said: “We have long known that under-saving for retirement needs to be addressed and there is an increasing urgency to provide the necessary financial planning support to consumers, so that they can be financially secure in retirement.
“A key issue is the need to address the difference in approach between consumers, who count the value of their house in their retirement income and the industry which does not.
“Tools need developing so that the public can estimate the value of their property and the costs of down-sizing or relocating to gain a realistic estimate of their retirement income.”
