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A crash in consumer
confidence has brought an end to the decade-long housing boom that
saw homes form part of retirement savings, according to new research
from MetLife Europe Limited (MetLife).
Around 40 per cent of homeowners say they are less confident about
using equity in their home as part of their retirement savings and
nearly a third of them are much less confident than they were a
year ago.
MetLife says analysts are predicting house price falls of at least
ten per cent this year, with prices dropping by a total of 23 per
cent before the housing market is predicted to drop in 2011. The
research shows that around 16 per cent of homeowners rely on equity
in their home for their pension.
Those aged 55 and over have suffered the biggest drop in confidence
in property forming part of their retirement savings, and around
46 per cent of that age group are less confident than a year ago.
Ed Gardner, chief executive officer at MetLife UK, said: “The
party is over for the moment at least in the housing market, with
most commentators agreeing that prices will fall this year and possibly
for another two years.
“That ought to act as a wake-up call for people who have assumed
that their property is their pension. Of course, equity tied up
in your home can form part of retirement planning but, as recent
events have shown, this does not provide a guaranteed pension.”
MetLife has launched the first personal pension plan to offer both
capital and income guarantees in a bid to retain consumer confidence.
- Pensions Age
July 2008
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