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17-Sep-07 11:10 [Research]
Young switch from pensions to homes for retirement Young people are increasingly shifting away from pension schemes and relying on property to fund their pensions, a new report has indicated.
The study, by the International Longevity Centre, showed that the number of 25 to 34-year-olds paying into personal pensions halved in the decade from 1995 to 2005 from 26 per cent to 13 per cent.
In addition to this, of those 26 per cent who paid into schemes ten years ago, the number still doing so as they have got older has dropped to 20 per cent.
Furthermore, just two per cent of those aged between 16 and 24 pay into a personal pension.
The study found that, with property prices soaring, more and more people were relying on the capital tied up in their homes to provide for the future.
James Lloyd, a senior researcher for the International Longevity Centre, said this was not a wise approach, as older people today were finding that they are often unable to convert property wealth into cash income.
He told the London Evening Standard: "They may find themselves in the same position as today's older cohorts, with large volumes of illiquid wealth that are failing to contribute to any extra income in retirement."
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In response to a worsening situation on the high street, major retailer Marks & Spencer (M&S) has announced 1,200 job cuts and big changes to the current final salary pension scheme they offer.
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The value of the hours of unpaid overtime in the UK is £26.9 billion, according to the Trades Union Congress (TUC).
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