Gen Z savers favour using property to fund their retirement rather than their pension, research from Standard Life has shown, revealing that nearly two in five (38 per cent) younger savers would fund their retirement using their property.

This compared to 35 per cent of savers that stated they expect to use their pension to fund their retirement.

However, this was in contrast to the research’s findings for Baby Boomers, as Standard Life revealed that 46 per cent of older savers would fund their retirement using their pension, whilst 16 per cent would use property.

Standard Life also found that more Baby Boomers would use both pension and property to fund their retirement rather than Gen Z, at 35 per cent compared to 26 per cent respectively.

More broadly, the research found that, whilst Gen Z showed a preference towards property, pensions were the most popular choice to fund retirement across all generations, as 43 per cent compared of all savers expected to use their pension to fund retirement, compared to 20 per cent who would choose property. Over a third (35 per cent) would use both.

Reflecting on the findings, Standard Life managing director for customer, Dean Butler, suggested that younger savers' focus on using a property as their main retirement asset, may be because saving for a flat or house purchase is more of an immediate priority for this group.

However, he also pointed out that, as Gen Z was the first generation eligible for automatic enrolment from the first day of their working lives, many savers are perhaps less aware of the potential pension pot they could grow in their lifetime, and how advantageous this can be due to employer contributions and government tax relief.

"As these sums grow, many will no doubt come to value their pensions more highly," he stated, continuing: “There’s no doubt the younger generation faces difficult trade offs between saving for the longer-term and saving for a deposit for a house.

“Owning your own home in retirement can be a real source of financial security and many will be targeting both property and pensions despite the challenges of doing so.

“Pension provision among older generations is mixed with some benefitting from generous defined benefit pensions, but also many, particular women, excluded from workplace pensions.

“What’s clear is that as the prospect of having to pay for retirement nears, using pension funds may feel a more realistic and flexible choice, whereas it can be trickier to realise the money you need from your main residence and options like buy to let investing can be a burden.”

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