Pensioners have lost almost £45billion in the property slump during the last 12 months, but research from uSwitch.com has found that 1.7 million pensioners are relying on the equity stored in their homes to fund their retirement.
For those who are already drawing their pension, 14 per cent are relying on the property they own - either through sale or equity release
- to fund their golden years, but this increases to 26 per cent of 55-64 year olds, and 45 per cent of 25-34 year olds.
Unfortunately for them, pensioners have already seen a huge loss from falling property prices, with the average price falling nearly £30,000 in a year.
Almost three million retired people are also hoping that the stock market will provide an income throughout retirement, but with the recent economic turmoil they will have to wait several years for the markets to recover and start bringing in the money.
The rise of unemployment – expected to hit 7.1 per cent next year, leaving 400,000 people out of work – could contribute to missed pension payments and leave this group of workers with the equivalent of £36million less in their January pension
pot, and £438 less the next year.
According to Government figures, one in 10 Britons are finding that they simply cannot afford to retire, and 37 per cent of those aged 65 or older feel they will have to work until they are 77 to build up a sufficient pension fund.
When it comes to the pensioners of the future, the average 25 year old should now be saving at least £129 a month in order to accumulate the equivalent income to minimum wage during their retirement, but if they do not start saving until they are 35, this figure rises to £208 a month.
Currently, just 39 per cent of the working population are paying into a pension scheme, leaving the remainder completely reliant on a state pension of just £4,732 a year.
Furthermore, with the average life expectancy rising to 95 by 2050, the number of pensioners is expected to increase from 12 million to 16 million, meaning that an additional £49billion of national insurance contributions will be needed to cover basic state pensions.
"The economic slump has certainly scuppered the best laid plans of people nearing retirement," said Ann Robinson, director of consumer policy at uSwitch.com.
"Consumers are faced with falling house prices coupled with a stock market crash and low savings
rates - these factors combined seem to cut off every possible life line to fund a happy retirement."
While "It's unrealistic to think that consumers will be able to make hundreds of pounds worth of savings every month, especially in the current climate," Ms Robinson urges people to carry out some retirement planning
"There are steps they can take to ensure a more comfortable retirement." she said. "Even though times are tough, it is important that people review their financial position in order to invest what they can to secure a better future. Every penny really does count."
© Fair Investment