New research indicates that nearly half of UK adults view outright homeownership as more important than pension savings for retirement security. A survey of 2,000 adults, conducted by retirement savings provider PensionBee, found that 45% cited outright homeownership as the most crucial factor, while 36% prioritised a large pension pot.
The findings also show that 51% of those surveyed would delay retirement to own their home outright. In contrast, only 9% would choose to retire earlier if it meant renting in later life.
This trend aligns with a July report from the Pensions Policy Institute (PPI), which warned that the British pension system's assumption of most people entering retirement without housing costs is becoming outdated. The PPI projects almost two million more pensioner households will be renting by 2044.
The survey also explored attitudes towards a potential government scheme allowing pension savings for first home purchases. Half of respondents aged 25 to 34 would consider using such a scheme. However, PensionBee's modelling suggests that diverting £20,000 from a pension at age 30 could lead to over £120,000 in lost retirement savings by age 67.
Becky O’Connor, Head of Pensions at PensionBee, stated that prioritising homeownership might be a rational financial decision as it removes a significant cost in retirement. She noted that rising house prices make outright ownership harder to achieve, potentially leading to later retirement or carrying housing costs into retirement.