The UK has an increasingly aging population meaning people are living longer overall. While this is a great thing, it can also lead to anxiety as to how individuals will fund retirement.

Many traditional means of saving are no longer adequate to fund an aging population’s requirements. Historically savings accounts have proven popular, but with their low rates their popularity is likely to decrease.

Investing in property is proving as a great addition to or alternative to a pension.

Within the UK property prices appreciate over time, the longer you own property the higher its market value will be. Property investment is a much more stable investment compared to savings accounts where rates will fluctuate frequently.

Key Partnerships conducted a study which highlights this issue. 35% of over 55’s are now worried about how they will provide for themselves financially as they age. Last year this figure stood at 21%. Meaning it has risen by 14% annually.

Also, in 2019, 15% of individuals said they had “no idea” how they would fund retirement. In 2020 this figure stands at 28%.

Property is now worth considerably more

The Bank of England’s savings rate stands at 0.1%. An exceptionally low rate for those trying to use savings accounts to fund retirement.

Keys research showed that in 2019 44% of over 55’s used savings accounts to save for retirement. 2020’s data shows that this figure has fallen by 10% to 34%.

Last year, the main source of income for retirees was to come from a pension. In 2019, 40% of individuals over 55 would be relying on a pension for their income. But in 2020 this figure has reduced to 30%.

Value of property

£1.133trl of unmortgaged property in the UK is owned by the over 65’s.

This wealth can be used to fund retirement living.

The region with the highest level of wealth is the South-East. The South East has £214.273bl worth of property owned outright. Out of 1.1 million households in the region, 656,000 individuals own their property outright.

Following this, London is the place with the highest property prices in the UK. The North West, East Anglia, and North West follow for having the highest proportion of properties owned without a mortgage.