Recent findings published by the Office for National Statistics as part of their Wealth and Assets Survey has shown that on average, households in the UK are feeling good about their personal finances, retirement income prospects, and levels of debt.
The Wealth and Assets Survey is an on-going survey that tracks the economic wellbeing of UK households, with a sample size of roughly 40,000. Its most recent results come as something of a surprise in an economic climate that has been characterised by low interest rates, rising house prices and growing problematic debt (the latter following a recent study conducted by StepChange).
52% of those surveyed found themselves to be either “fairly” or “very confident” about their retirement income and the standard of living it would provide, despite concerns over how much people have been, in general, been paying into their pension pots. This is an increase of 11% from the previous year.
The percentage of people who were able to reasonably maintain bill and credit payments without needing any extra help has gone up from 53% to 63% for the year to June 2015.
Equally, the number of people who found their debts to be problematic or burdensome has gone down from 34% to 25%, leaving 75% reporting that their level of debt is “not a problem at all.”
The figures will be welcomed with open arms by George Osborne, who will likely make use of them to bolster claims he has made already about the current government ‘s economic policy working to strengthen our economy, leading to Britain “walking tall again”.
The figures also showed the ways in which people expected to be making most of their money in the future. Some 44% believed that in the coming years, property is where the most money is to be made, with only 10% believing the same for the stock market. The same reliance on money from property is something that is growing, particularly among those approaching retirement age. The 44% of those who plan to make money in property is compared to 25% who will be relying on a workplace pension. A recent study from Fidelity International showed that around a quarter of retirees will be using property to make money post-retirement, with 11% saying that they will be treating it as their sole or main source of income.
The surge of people seeing property as a treasure trove for straightforward income has not come without its warnings; Maike Currie at Fidelity has said that “savers considering property as a means to generate income in retirement should seek proper financial advice to understand whether they will get the return they anticipate”.
She went on: “buy-let does not mean a guaranteed income, and it ‘s certainly not a diversified strategy”.
These warnings come to highlight the fact that while house prices continue to rise (albeit at slightly varying speeds); and while properties, particularly in the capital, are certainly a fairly sound investment, this does not mean that investing in property is akin to printing money, as many are want to believe.