A significant proportion of Brits, who are set to rely heavily on their state pension to fund their retirement sufficiently, are living in a "daydream", according to equity release trade body Safe Home Income Plans (SHIP).
New research by SHIP has revealed that 61 per cent of Brits plan to fund their later years using their state pension compared to 35 per cent who will rely on a private pension, with 49 per cent expecting to have a similar or better standard of living in retirement as they do when working.
To achieve this desired standard of living, 50 per cent said they will use their savings, while one in five Brits plan to plug their pension savings gap by working part-time to provide an additional income.
However, additional research by SHIP has contradicted this assertion as a third of working Brits admit to having no regular pension plan, with 21 per cent saying they have saved into one in the past but no longer do.
Meanwhile, of those who do save regularly just under a quarter have admitted that their pension fund will not be big enough for them to retire comfortably on.
Commenting, Andrea Rozario, director general of SHIP said: "It is clear that many people are living in a retirement funding daydream. They aren't saving enough money, they aren't consulting financial advisers and they aren't talking about their options with their families – and yet they still expect to have a comfortable retirement, with the help of the state.
Following a recent report by the Pension Policy Institute which stated that by 2030 there will be more than 14 million over 65s, Ms Rozario claims that there will be "no way" of supporting all of those in need and suggests it is time to look at other ways to fund retirement, such as equity release.
"By 2030, the over 65's will be able to access £359 billon worth of housing equity, and could be using this to ensure the comfort of their retirement, rather than relying on a pot of public resource that may not stretch to accommodate them," she said.
© Fair Investment Company Ltd