Generational opinion gap in using property to fund retirement
New research has revealed a significant attitudinal difference between generations in regard to using property wealth to support later life financial stability.
According to Retirement Advantage, those aged under 45 are significantly more comfortable with the concept of debt in later life than those above this age.
UK consumer research found that 71% of property owners aged over 55 feel that it’s not normal to take on new debt to fund retirement – in fact just 5% agreed.
For those in the previous age bracket of 45 – 54, the split between those who agreed and disagreed was slightly less significant, at respective percentages of 11% and 60%.
The gap lessened even more so for those aged under 45 who own property, with 29% agreeing that taking on new debt to boost funds during retirement was normal. 35% disagreed.
For the 25 – 34 year-olds, the figures flipped, with 39% in favour and 31% against.
Commenting on the figures was Alice Watson. The Head of Product and Marketing at Retirement Advantage said: “Future generations are increasingly at ease with the idea that debt and property wealth will be sources of retirement income. The fact that younger people today are buying homes later, and taking on more student and mortgage debt than previous generations, may explain why.
“A mix of sluggish savings rates, poor wage growth and the switch from defined benefit to defined contribution pensions means that we face the prospect of a sizeable retirement savings gap in generations to come. It is, therefore, an inevitability that using property wealth to try and plug that gap will become the norm. Property is typically the most valuable asset people own, and it bodes well that future generations of retirees seem comfortable with the idea of using it in a holistic way.”