Recent research has shown that over half of non-retired adults in the UK do not contribute to a pension scheme. With the ending of many final-salary pension schemes and many people struggling to make ends meet in today’s financial climate, it’s no surprise that pensions have become highly unpopular.

However, that isn’t to say that people aren’t looking to their future – many people are looking to property to fund their retirement funds. But with fears over a property price slump, is property really a better investment than a pension?

The attractions of property are clear – it’s more tangible for a start. There is something there you can see and touch, and it isn’t just a bunch of numbers on a piece of paper. Property is also flexible – there are no limits on when you can sell the house to release the equity in it and you also have a lot of easy control – you can pick the area the property is located in, the style, number of bedrooms and even the type of tenants you have.

The problem is that property prices can go up as well as down and there is no guarantee that you will be able to sell the property when you want to. If you need to sell quickly or you are planning to sell your property when prices are on the slide, you may well lose out. It is also hard to balance the risk with property unless you have a large number of properties in your portfolio.

Another downside to property is that it can take quite a lot of money to get into the property market, particularly in today’s economic climate – you need a deposit, need money to cover the stamp duty and solicitor’s fees; you’ll need to make sure you have some cash in reserve to pay the mortgage in case the property is not rented all year round, plus you’ll need a small cash reserve to help maintain the property. It isn’t surprising that as money has become tighter, many buy-to-letters are finding it difficult to make all their sums add-up.

In contrast, pensions can be boring and they often don’t match some of the gains in the housing market, but they can help to spread the risk. Plus pensions have good tax breaks – if you are a basic rate tax payer and you pay £80, your pension will be topped up to £100 by the government. Higher rate tax payers fare even better with 40% tax relief, and these tax reliefs can certainly add up over time.

So, whilst there is nothing wrong with wanting to buy property to help fund your retirement, having some money locked into a private pension is probably a good idea. Remember that you can invest in property funds which can then be put into a pension wrapper allowing you the best of both worlds.

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