High-net-worth-individuals (HNWIs) are relying heavily on their housing wealth as a retirement fund, according to the latest Wealth Index report published by Saltus.

A study by the wealth management firm found that 84% of HNWIs would be using housing wealth to fund at least part of their retirement, while 70% are planning to fund at least 25% of the cost.

Saltus surveyed attitudes among more than 1,000 people in the UK with investable assets of over £250,000. The research revealed that younger people are the most likely to be relying on property to fund their later years, with just 7% of those aged between 25 and 34s indicating they don’t plan to use any housing wealth to fund their retirement.

When asked what proportion of their retirement they plan to fund with housing wealth, two in five respondents (40%) said up to 50% of their entire housing wealth, while another 30% of HNWIs said they would use at at least 75% of their housing wealth. On average, respondents in this demographic plan to fund around half (49%) of their retirement using housing wealth, according to the findings.

Despite the study showing the over-65s to be the least likely age group to use housing wealth to fund their retirement (19%), of those that do, a third (33%) are planning for it to cover 100% of the costs.

Partner at Saltus, Michael Stimpson, commented: “The majority of people intend to fund their retirement through some degree of housing wealth. While the temptation to fill gaps in pension pots this way is understandable, it is a fundamentally risky strategy. It depends on residential property continuing to retain its value or even rising in value, which is far from a certainty.

“There really is no substitute for careful financial planning. The best retirement plans are ones where people have been clear about their aspirations and have worked towards their goals in a careful and methodical way in the context of other demands on their spending and saving. It may not be an easy win, but it is the best way to retire in comfort and with peace of mind after a lifetime of hard work.”

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