People opt to pay off house rather than save

The number of people who identify paying off their house as a form of saving has increased 30 per cent since November 2003 (from 36 per cent to 47 per cent). In comparison to May 2003 this is a 27 per cent increase (37 per cent to 47 per cent).

The survey, conducted by AMP, also shows that there has been an overall downward movement in most forms of retirement saving during the past year. Participation in superannuation plans dropped 26 per cent since May 2003 and is now at the lowest ever level since July 2000. Bank or term deposits dropped 48 per cent and there was a 55 per cent drop in the numbers who claim to be saving through direct investments in shares.

Investing for retirement through a residential property other than the home remained the same at 11 per cent. "These figures show that paying for a home has become all-consuming as people are feeling the pinch from larger mortgages," says AMP managing director Ross Kent.

"In spite of the apparent softening in residential property prices, people still seem to regard getting into property as a key priority, while retirement planning appears to be lower down their list."

The research also shows that more 18 to 24-year-olds are saving for a house deposit. "Only 19 per cent of this group was saving for a house deposit in November and that has now jumped to 35 per cent," Kent says.

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