A new report by wealth manager Saltus, which surveys high net worth individuals on how they will fund their retirement, was released this week.

High net worth individuals rely on their housing wealth as a retirement fund, a new Saltus Wealth Index report reveals. 

The report, which surveys attitudes of over 1,000 people in the UK with investable assets of over £250,000, shows that 84 per cent of respondents said they would be using housing wealth to fund at least part of their retirement, with 70 per cent planning to fund at least 25 per cent of the cost.

The research revealed that younger people are the most likely to be relying on property to fund their later years, with just 7 per cent of 25 to 34-year-olds saying 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 said up to 50 per cent while one in three said at least 75 per cent on average. Respondents in this demographic plan to fund around half of their retirement using housing wealth, the report adds.  

On average, just one in 50 HNWIs said they plan for 100 per cent of their retirement to be funded by housing wealth, but this doubles to one in 25 for 25 to 34-year-olds and more than triples for the wealthiest respondents, the report reveals. 

Of those with assets of £3 million or more, one in 14 said their housing wealth will be the only source of funding for their retirement. On average, those with more than £3 million plan to fund most of their retirement using housing wealth.

Interestingly, despite the over 65s being the least likely to intend to use housing wealth to fund their retirement, of those that do, a third plan for it to cover 100 per cent of the costs, the report shows.

The regions where respondents plan to use their housing wealth to fund at least half of their retirement costs are the East of England (53 per cent), the North East (54 per cent), the East Midlands (50 per cent) and the South West, the report adds. 

Respondents form Northern Ireland plan to use housing wealth to fund just 39 per cent of their retirement on average, with 29 per cent saying they won’t rely on it all. 

Welcoming the findings, Michael Stimpson, partner at Saltus, said: “The second Saltus Wealth Index Report shows that 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,” he added.

“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,” he said.