Property 'is not a reliable pension'
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Posted: 22nd Jul 2008
Homeowners are being warned not to be over-reliant on their property to see them through their retirement years, experts have warned.
House price drops and a rise in the cost of living have highlighted to householders the importance of avoiding "putting all their eggs in one basket".
Using the latest figures from the Council of Mortgage Lenders, Friends Provident said that if the current situation reflects that of the last slump, homeowners could be left with a negative equity of £89,850.
Those who do not have savings or a pension and are relying on their property to see them through may find themselves struggle with living costs as home value falls.
Jeremy Ward, head of pensions and marketing at the firm, said: "Our research shows a potential crisis for some people in the future.
"People have depended on the property market in the past to fund their retirement, but with the uncertainty over the past few months and the current credit crisis they should not put all their eggs in one basket."
A recent survey from Prudential found that 29 per cent of people splashed £8,000 more in their first year of retirement than other years – 19 per cent of which regretted the splurge. 
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