Research by the Pensions and Lifetime Savings Association (PLSA) found 47% of 35-54 year olds - often described as ‘Generation X’ - the equivalent of 8.3m people planned to use property to help finance their retirement.
However, 1.9m of these were yet to buy a property and appeared to base expectations of their future financial security on an asset they did not own and might never own.
The association said 36% of 35-44-year-olds who have yet to buy their first home still felt they would be able to use this asset in retirement, a sentiment shared by 14% of those aged 45-54 group who were yet to buy.
Research findings also revealed that 54% of Generation X gave little thought to retirement income.
Reliance on using unowned property was greatest in the east of England at 14% and lowest in Yorkshire and the Humber at 2%.
PLSA eternal affairs director Graham Vidler said: “Over eight million people between the ages of 35 and 54 intend to use property to help finance their retirement.
“Given the significant house price growth that we have seen, this might seem an entirely sensible addition to their pension.
"However of this group, two million people have yet to even take their first step onto the property ladder which is a real concern and suggests they are basing their future financial security on an unrealistic ambition.”
He also noted that 57% of Generation X had no firm plan to finance their retirement “which is also incredibly worrying”, adding that this group found itself “in the unenviable position of being too young to benefit from generous defined benefit pension schemes, and too old to receive the full benefits of automatic enrolment”.
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