A recent study by Standard Life has revealed a notable shift in retirement planning among Gen Z, with a third of this demographic viewing property as a key retirement asset over traditional pensions.
This trend marks a 15% increase compared to Baby Boomers, highlighting a generational shift in investment priorities.
While 42% of Baby Boomers still rely on pensions for retirement funding, only 30% of Gen Z share this preference, opting instead for real estate investments. Millennials also prioritize pensions (36%) over property (22%), indicating a transitional pattern in retirement strategies across generations.
The inclination towards property investment is partly driven by Gen Z’s perception of their homes as a significant wealth source, a view less commonly held by older generations.
However, Standard Life cautions against overreliance on property due to the current challenges in the housing market, noting that only 10% of Gen Z currently have a mortgage.
Dean Butler, managing director for Retail Direct at Standard Life, advises a balanced approach: “Relying on one asset alone for your retirement can be risky, so it’s sensible, if at all possible, to build up a more diversified portfolio that’s made up of different funding options and not to overlook the benefits of pensions as well as easy access ‘rainy day’ savings.”
