Despite the massive multi billion pound pension deficits, most people believe employer pensions are the best way to save for retirement.
Workplace pensions were the favoured way to save for 38% of over 40s – down slightly from the previous two years.
Property came second, with 29%, with personal pensions lagging in third at 14% and ISAs next at 7%, says the survey for the year ending December 31, 2016 by the Office of National Statistics (ONS).
Although most people believed work pensions were the safest way to save, when asked about which investment was likely to show the best return came down clearly in favour of property.
Buy to let and second homes led workplace pensions by more than double – 49% to 20%.
ISAs and savings drop out of favour
“Since July 2010 and continuing into the latest period of July 2016 to December 2016, the percentage of people identifying property as making the most of their money has been increasing, which may reflect a growing confidence in property prices over this period,” says the ONS report.
“In contrast, the popularity of Individual Savings Accounts (ISAs) and savings accounts has been decreasing, possibly reflecting low interest rates over this period affecting people’s attitudes towards these types of investments.”
When the survey asked about sources of retirement income, property disappeared from the top five, possibly indicating property investors plan to sell up before retirement rather than manage their portfolios for income after giving up work.
“The state pension has been the top option consistently since July 2010 with a small increase in the number of people giving this as the top option in July 2016 to December 2016 (86%) compared with previous periods (81% or 82%),” says the ONS.
8% can’t be bothered with a pension
“The next most popular option was occupational or personal pensions with 68% of respondents in July 2016 to December 2016 giving this option as a source of money for their retirement.”
Revealingly, the ONS asked under 60s not receiving or paying into a pension about why they were not saving for retirement.
The results showed 55% had a low income, 29% said they could not afford to save into a pension, 16% had too many other bills or debts, while 15% considered they did not know enough to invest and 8% could not be bothered.