One in twenty (5 per cent) of non-retired people - the equivalent of around two million people - say that they are planning on selling their primary residence to fund their retirement, according to the latest consumer research by Baring Asset Management.

The survey revealed that, in total, 13 per cent of people – nearly five million – say they are planning to rent or sell property to fund their retirement, up from 11 per cent last year, and the highest such figure since 2009.

Baring said that the economic climate has had an impact on people looking to use property to fund some or all of their retirement. Indeed, the number of people saying they now plan to sell or downsize a property to fund all of their retirement has doubled since last year, rising from 2 per cent to 4 per cent (equivalent to 1.5 million people).  The number of people saying that they are now planning to rent out property to fund all or some of their retirement was also 4 per cent, the firm said.

“Property can form part of a risk-adjusted, diversified investment portfolio but this year’s survey indicates that more people are investing in property as a retirement source and the concern is that this could mean they are over-concentrated in the asset class.  It is worrying that the number of people relying exclusively on their property to fund retirement has increased. Property prices can be volatile so putting your faith in your home to fund retirement is risky,” said Marino Valensise, chief investment officer at Baring.

Further evidence of a significant shift in the acceptance of property as a retirement source can be seen in the number of people saying they have “never planned” to use property to fund their retirement. Around a third (35 per cent, equivalent to 12.7 million people) of respondents say this in the 2013 Barings survey, although it is telling that this has fallen significantly over the past five years from 59 per cent in 2009, the firm said.

The survey also showed that on a regional level, people living in the south west are potentially the most overweight in property, with 12 per cent of people in the region saying they plan to sell their primary residence to fund their retirement and 14 per cent saying they plan to sell or rent other secondary properties.  The least potentially exposed are those in Scotland and the West Midlands: 3 per cent of people in each region say they plan to sell their primary residence to fund their retirement and 7 per cent to sell or rent other properties.

The survey was conducted online by ICM research on behalf of Baring Asset Management of 1581 non-retired UK adults between 5 and 7 July 2013.