Brits who are relying on their property as a pension pot have seen £29billion shaved off the value of their properties in the last year.

According to new research from Baring Asset Management, falling house prices have contributed to the shortfall that is now facing almost three million Brits.

Of those three million who are relying on their property pension, 25 per cent are aged 55 to 64, while a further seven per cent are aged 65 or over, leaving them little time to build up a less risky alternative retirement income.

Commenting on the statistics, Marino Valensise, chief investment officer at Barings, said: “During the long house price boom it was convenient to view your home or other property as your pension pot but recent events have exposed the risk of this approach. Sadly those approaching or at retirement age have little or no time to rebuild their savings and are paying the price.”

The research also found that despite the financial crisis and house price falls, 74 per cent of those relying on property as a pension said they have made no changes to their pension pot over the last year.

In fact, just four per cent have started to make alternative pension plans and look at other investment opportunities.

Valensise adds: “What’s really alarming is that so many people have not changed their retirement plans despite what’s happened to house prices. Saving for retirement should start as early as possible and involve a well planned approach that controls risk through spreading investments across several asset classes.

“Apart from the tax efficient benefits of a pension plan, putting all your retirement eggs in the property basket is hopelessly optimistic.”

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