The survey found 51 per cent of homeowners regarded their home as the major asset after their pension. But Lincoln suggested people were concentrating too much on paying off their mortgages instead of building other savings in addition to pensions.
Lincoln revealed the average age that homeowners expected to have paid off their mortgage was 56-and-a-half. Based on a sample study of 2007 adults, 1.58 million expected to clear their mortgage by 65, while 481,000 thought they could do so by 45.
Ian Noble, head of strategic partnerships at Lincoln Financial Group, commented: “It can be difficult building up other savings while paying off your mortgage and also investing in a pension. But it is potentially risky to believe your home will provide for your retirement if your pension is not sufficient.
“There are issues to consider when using equity from your home to pay for your retirement, such as having to move house to a smaller home, planning for inheritance tax and how to invest any equity you do release from your home. It can, therefore, make sense to build up savings while you are working and possibly to defer clearing your mortgage.”
However, Ashley Clark, director of NeedAnAdviser.com, felt property was an essential part of peoples’ retirement plan. He said: “Property has proved to be the most consistent asset class on the planet. It is a very positive performer and I would suggest people invest in it and continue to invest. Plus, it is a tax efficient investment as it grows tax free. But when people retire, they should sell the property, so it won’t be subject to means-tested benefits.”
