Baring AM: Brits don’t see pensions as funding source
A survey carried out by international investment firm Baring Asset Management found 44 per cent of respondents do not consider pensions a retirement funding source.
Of the 1,500 people questioned, 17 per cent said they expected inheritance to help fund their retirement while 11 per cent anticipated that their property would allow them an income after they gave up work.
According to Baring this is equivalent to 15.7 million people aged over 18 who are not yet retired.
When asked to select which assets or investments they view as funding their retirement, a pension was chosen by 56 per cent of people.
The number of people expecting cash to form part of their retirement planning increased from 26 per cent in 2011 to 29 per cent in 2012, representing about 10.5 million people.
The number of those who said they were relying on inherited assets to form part of their retirement rose to 26 per cent this year compared to 20 per cent in 2011.
However, with the average UK inheritance estimated at around £45,000 per person, many people may be overestimating the role inherited assets may play in helping fund a retirement.
Marino Valensise, chief investment officer at Barings, said: “It is very surprising to see just how varied retirement funding sources have become for many people in the UK.
“While diversification is crucial to best-practice asset management, the suitability of some of these sources can be questioned, such as a reliance on inheritance. Overall, the most challenging finding is that nearly half of the adult UK population admit to not having a formal pension at all.”
The study also found that one in four, or 8.8 million people, admit they simply do not know how they will fund their retirement.