Scots urged to raise pension saving as house prices fall

Published on Friday 24 October 2008 19:45

NEARLY half of all adults in Scotland do not save in a pension, a new study has found.

Pension saving in Scotland is significantly down on the UK average, with 49 per cent not putting money into a pension scheme, compared with 41 per cent across the UK as a whole, according to research by adviser and broker Brewin Dolphin. Instead it revealed that 20 per cent of Scottish homeowners – and seven million UK homeowners in total – intend using their property to fund their retirement. As house prices fall, however, that strategy could backfire badly, warned David Rankin, assistant director of financial services at Edinburgh-based Bell Lawrie, a division of Brewin Dolphin.

"The recent huge drop in house prices could result in those seven million adults nationwide seeing thousands of pounds wiped from the value of their property with serious implications for their retirement plans. Housing is not the gilt-edged investment many believe it to be. The widely held view that housing prices outperform equities over the long term simply isn't true. While the average real rate of return of property was 270 per cent over the past 20 years, the rate for equities was far higher at 470 per cent."