Britons investing in homes rather than pensions
Millions of Britons are spending a fortune on home improvements because they are worried that their pensions will not be sufficient to fund their retirement.
A survey established that homeowners are investing more than twice as much money into their properties every month for improvements and maintenance as they are into their pensions.
Homeowners are optimistic that extensions and new fitted kitchens will increase the value of their home and providing cash for their retirement. Property owners have been encouraged by a decade of property price increases turning some people into millionaires.
Workers have become disillusioned with company pensions after many firms axed final salary schemes which ensure a good income in retirement. Consequently, workers have opted to use any surplus cash to fund huge mortgages to buy or improve their home.
The survey was conducted by Lincoln Retirement Income and established that a typical homeowner has spent around £7,500 on home improvements, an equivalent of £311 a month. This is twice what they are paying each month into a company pension scheme.
50% of homeowners said they see their property as part of their retirement savings, an asset to be sold to raise a lump sum when they downsize to a smaller property.
Recent research from Baring Asset Management established that 3.2 million Britons are depending on property investments to fund their retirement. However, Barings commented that this will leave them at risk of fluctuations in the UK property market and interest rate movements.