Investing in property is thought to be a better route for creating a nest egg than employer pensions, found the Office for National Statistics (ONS) latest Wealth and Assets survey.
Little more than one in five interviewed between 2016 and 2017 said work saving schemes were the best use of their money – down from almost a quarter in 2012.
Over the same time period, the amount of people choosing property increased from 40% to 49%.
However, employer pensions were considered a safer way to save for retirement than property, with 40% opting for the former and 30% for the latter.
Downsizing the property
Almost a quarter of people who have not yet retired expect downsizing to be among the top sources of income in retirement, behind state, employer pensions and savings, the survey showed.
Nathan Long, senior pension analyst at Hargreaves Lansdown, said: “There are some peculiarities swirling around in the world of retirement saving.
“The government’s attempts to make buy-to-let investing less attractive have done nothing to dim the attraction of property as the best way to make most of your money.
“The twin benefits of employer pension contributions and tax relief are seemingly not whetting the appetites of pension savers, it may not be until employer minimum contributions rise in 2018 and 2019 that we see this change.”
Former pensions minister and Royal London director of policy, Steve Webb added: “It is understandable that the public might imagine that property was the best way to save for retirement.
“Physical property is much more tangible than a pension, and pensions all too often attract negative headlines.
“But the reality is that saving through a workplace pension is a hugely effective use of money, not just because of generous tax breaks but because of the money that an employer will contribute.”