Property is the best way of saving for retirement, most Britons believe. In fact, a whopping 49 per cent of Britons surveyed by the Office for National Statistics said property was best.
The latest edition of the ONS wealth and assets survey revealed the shocking figures.
Back in 2010, the UK office started asking the question and since then the figure showing people who believe property is the best investment has only increased.
From July 2016 to June 2017, 49 per cent of Brits considered property would make the most of their money.
The second most popular option was employer pension schemes – supported by 22% of those surveyed.
The news comes as it was revealed the popularity of ISAs and savings accounts has followed a decreasing trend.
So, is property a better investment than a pension scheme?
Louisa Fletcher, Property Expert said: “For many people, their home is their greatest financial asset with many seeing it as a future nest egg, so the results of the data from the ONS aren’t a great surprise in that respect.
“It’s never too early to start planning for the future, but in order to make sure that they are set up for financial success in later life, homeowners should ideally aim to pay off their mortgage as soon as they can to ensure that they own it outright as early as possible.
“That way, they can make their asset work as best possible for them and their individual circumstances, whether that be to downsize in order to realise capital to top up their pension income, or to utilize one of the equity release schemes available instead and stay in their property.
“Given that interest rates are still at historic lows, with sound financial planning it’s entirely possible to take a competitively priced fix and perhaps make a slight overpayment every year, which will not only pay down your mortgage more quickly but also mean you pay less interest overall.
However, Louisa warned house prices can fall as well as increase.
She said: “[It’s] easy to forget since we’ve seen rising house prices in many areas for such a prolonged period.
“That’s why aiming to pay down the mortgage as soon as you can to avoid nearing retirement age yet having years left on the term of your mortgage with a chunk of capital that you need to pay down is a situation best avoided if at all possible, together with having a secondary pension strategy in place if funds allow.”
Ray Withers, CEO Property Frontiers, explained to Express.co.uk he believed a combination of the two would support Britons best through their retirement.
He said: “A combination of the two – don’t put your eggs all in one basket!
“Property is an excellent way to diversify for those who have doubts about the future of pensions, which is under pressure from our ageing population.
“Rental income behaves much like an annuity, though with slightly more hassle. And making well thought out calculations about when you might need to release equity is paramount.”
However, Withers did issue a warning with his statement. He said: “But I would never recommend putting your entire retirement savings into one single property: either combine it with a pension or spread your risk across a portfolio of locations and asset classes.”
It comes after the news that house prices have dropped since last year, the Halifax House Price Index revealed this morning.
The headline figure of a 2.2 per cent year on year increase in average house prices is lower than the 2.7 per cent annual increase reported in December, and prices have cooled slightly month on month with a 0.6% drop between December and January.
In real terms, according to the Halifax the average house price in the UK was £223,285 last month, versus the £219,217 in January 2017, but lower than the highest recorded figure of £226,408 in November 2017.
That said, it’s perhaps worth bearing in mind that the Halifax and other indices have forecast that this year will be flat in terms of price growth with a projected figure of between zero per cent and three per cent and the number of transactions holding at or around the total number for last year, which would then contextualise a headline figure of over two percent annual growth as absolutely within market expectations, given the current economic climate.