The end of the UK’s decade-long housing boom has shattered consumers’ confidence in using their home as part of their retirement savings, according to MetLife’s research.

Around 40 per cent of homeowners say they are less confident about using equity in their home as part of their retirement savings and nearly a third of them are much less confident than they were a year ago.

Analysts are predicting house price falls of at least ten per cent this year, with prices dropping by a total of 23 per cent before the housing market is expected to bottom out in 2011.

Research shows that around 16 per cent of homeowners rely on equity in their home for their pension.

However, housing market weakness reduces the equity that homeowners can release from their property to boost retirement income, and people who are near to retirement are most at risk if they need to cash in on their property immediately.

MetLife’s research shows that it is those aged 55 plus who have suffered the biggest drop in confidence in property forming part of their retirement savings. Around 46 per cent of that age group are less confident than a year ago.

Ed Gardner, chief executive officer at MetLife UK, says, ‘The party is over, for the moment at least, in the housing market, with most commentators agreeing that prices will fall this year and possibly for another two years. That ought to act as a wake-up call for people who have assumed that their property is their pension. Of course, equity tied up in your home can form part of retirement planning but, as recent events have shown, this does not provide a guaranteed pension.

‘Saving into a pension is tax efficient and should be a vital part of financial planning. Savers need access to a wider range of flexible retirement solutions including guarantees.’