Property investment 'should not solely be relied on for retirement'

Posted: 28 Aug 2009 09:48:04 GMT

Homeowners who are thinking of property investment as a way to fund retirement should make sure they consider using a variety of assets, one company has said.

Paul Goodwin, head of pensions marketing at Aviva, said that it is a good idea to mix property investment with other retirement funds so that there is not too much resting on the value of just one product.

He went on to say that depending on people's circumstances, they may not be in a position to sell that asset when they are ready to retire.

Property investment can have a "liquidity issue" in terms of retirement.

"You might want to retire at a particular point in time, but what do you do if you can't sell your property? How do you convert your property into an income generating asset," he remarked.

However, he added that there were options such as converting property into an annuity or going down the equity release route.

A report earlier in August from Baring Asset Management, eight per cent of the UK population - 2.8 million people - rely on property investment to fund their retirement.

Of these, 74 percent have no alternative plans.


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