44% of people do not currently expect to use a pension to fund their retirement, according to new research from Baring Asset Management.

This is equivalent to 15.7 million people aged over 18 who are not yet retired. When asked to select which assets or investments they view as funding their retirement, a ‘pension’ was chosen by just 56% of people, highlighting a lack of effective pension planning by a significant number of UK adults, Barings said.

The research shows that many people are relying on property, cash and even an inheritance to fund their retirement. The number of people expecting that cash will form part of their retirement planning increased from 26% in the last survey in 2011 to 29% this time (some 10.5 million people). The number that selected property as forming part of their retirement fund also increased two percentage points to 29%, equating to some 300,000 more people.

Meanwhile, 17% of people, or 6 million in the UK, said they expect inheritance to help fund their retirement. This expectation is more acute for people in the A/B social segment (the upper and middle classes): 23% said that inherited assets form part of their retirement planning, up from 20% in the last survey in 2011. However, with the average UK inheritance estimated at around £45,0003 per person, Barings believes many people may be overestimating the role inherited assets may play in helping fund a retirement.

“It is very surprising to see just how varied retirement funding sources have become for many people in the UK,” said Marino Valensise, chief investment officer at Barings.

“While diversification is crucial to best-practice asset management, the suitability of some of these sources can be questioned, such as a reliance on inheritance. Overall, the most challenging finding is that nearly half of the adult UK population admit to not having a formal pension at all.”

The study also found that 25% – 8.8 million people – admit they simply don’t know how they will fund their retirement.

In a separate question in the Barings research specifically about pension arrangements, 11% of respondents – the equivalent of 4.1 million people – stated that their property is their ‘pension’ and they have no other pension provision apart from their property.

Valensise added: “It is astounding that over one in 10 people have focused all of their retirement planning on property. This suggests poor planning in terms of asset allocation, and a poor understanding of the risks involved, by large numbers of people in the UK. Assets such as cash and property, and instruments such as ISAs and investment trusts, can play an active role in retirement planning if managed correctly.

“For those people that have put aside assets for retirement, it is critical to make sure that these are allocated effectively and efficiently, properly adjusted for risk and with a clear understanding of the timescale involved.”