News: Why Britons Are Choosing Property Over Pensions

A new survey by the Office for National Statistics has found that 45% of people believe investing in property is a better option than paying into a pension. Only 25% of the respondents believed that their company pensions were the most secure investment for their retirement.

Below, we discuss why people in the UK are turning to property investment rather than pensions to secure their future.

Why Property Is So Appealing

The Office for National Statistics stated that the results of its survey reflected high confidence in the property market, and low confidence in pensions.

Property investment is often seen as a more attractive option than pension savings because the wealth bound up in a property can be released simply after selling it, whereas pension schemes only release funds once the individual has reached a certain age.

This has led many to invest in buy-to-let ventures, so that they can rely on the sale of a second property in later life. Even the chief economist for the Bank of England, Andy Haldane, candidly admitted that he thought buying a property was a wiser option for retirement than a pension.

Just 8% of the survey respondents said they favour stocks and shares. With interest rates dwindling, less than 10% of Britons currently believe that ISAs offer good returns. The ONS claimed that these responses were given because house prices have increased so rapidly over recent years. It seems that if individuals can invest and succeed in the property market, they can expect to have a secure and prosperous retirement.

A large number of respondents stated that they do not understand how pensions work, which suggests that they are less likely to trust them as a secure means of saving for the future. Many did, however, understand how lucrative the property market is, potentially making it a more appealing investment for them.

Why Pensions Are Less Attractive

UK pensions have received a lot of negative press recently. Reports of shortfalls in the state pension pot, the rise of the eligible pension age, and the failure of many company pension schemes to pay out to retired workers have left many feeling unsure about their pensions . Sadly, this has been highlighted by the recent events in connection with the BHS pension scheme.


Many feel that pensions are a less attractive option because they can be unstable. Private pension schemes, for example, rely on investments and how well these perform. Moreover, pensions are usually locked away until a certain age – 55 at the very earliest for certain private pension schemes.

On retirement, many people use their pensions to create an income for life, but due to a large amount of the population living for longer and low yields on gilts, the income that pensioners receive often turns out to be lower than they expected.

The value of pensions has also been in steady decline. In 2003, an individual aged 65 with a pension fund of £50,000 could have got an annuity with a five-year guarantee of approximately £3,575 a year. However, 10 years later the same fund would buy an income 14.7% lower, at just £3,050 a year.

Despite the negativity that has surrounded pensions recently, many still invest in some form of private pension or work pension, but clearly many are also choosing to invest in property to ensure secure, comfortable and enjoyable retirement.

Securing Your Future With Property

If you would like to invest in property but you need financial assistance, follow our Beginner’s Guide to Bridging Finance. Alternatively, get in touch with our team and we will answer any questions you may have.