The rising popularity of alternative forms of investment to fund retirement is threatening the private pensions industry, assurance software firm Mastek has warned.
A survey of more than 2,000 people found 66% were opting for products other than traditional pensions to fund their lives after they're 65.
The study also found nearly nine in ten believe it is important to save for the future, while 76% believe it is important to provide financial assets for their dependents’ future.
Almost half feel they do not have enough money to save for their retirement but only 3% will rely on their state pension.
Brian Please, director for UK insurance at Mastek, says: “People are losing faith in pensions as vehicles to provide for them in retirement and the industry needs to react to the changes in saving habits we have seen develop in recent years.
“It’s the return on the investment and the inflexibility of getting at that money when they might need it.
“Savings of any form are good. To most people that means their house and a house that was traditionally there for inheritance purposes turns into a necessary asset for pensions.
“Property assets for many are now as important a source of capital to meet their retirement needs but house price growth cannot be relied on to bail consumers out forever, and many of the pension products currently on the market need to be re-worked and, in some cases, replaced to reflect the new requirements of the consumer who will phase their retirement and live a lot longer.
"Flexibility and simplicity need to be the new priorities in retirement capital.”
Last month a survey by Skandia showed almost 60% of people aged 22 to 34 expect to have enough income to retire comfortably but just 43% have actually looked into retirement saving or investing.
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‘Important to have an anchor’
Report to be written by TPR
Lack of innovation for solutions
Some 2,000 consumers affected