(Special)-More than one million people over the age of 50 in the UK plan to use the value of their homes to provide retirement.

According to a report done by the Liverpool Victoria insurance (LV), about 12 per cent of over 50s have opted to save less for their retirement because they believed the value of their home would continue to rise.

A further 13 per cent say they couldn’t afford to both buy their own home and invest in traditional pensions, because property prices were so high.

The fact that a slump in the British property market has seen an average £27,250 (CAN$48,000) decline in property values since autumn 2007 might cast doubt on these plans.

However, only two per cent have been turned off the idea of using their home to fund retirement, according to the LV report. Eleven per cent plan to take advice on drawing on the equity in their homes for retirement income.

"In the decade leading up to the credit crunch, more and more homeowners saw their property as a potential cash cow to aid retirement," said LV spokesperson Vanessa Owen. "But in a matter of months millions of pre-retirees have seen both their property and pension fund values battered.

"Despite this, their confidence in the long-term value of bricks and mortar remains. House prices still have some way to go before full recovery but with increases for six consecutive months now, people are feeling more confident that their home can still play a big part in helping to finance their retirement."

Some over-50 year olds have plans to recoup this lost equity. One in six (17%) will make home improvements to add to the value of their house, and one in five (21%) say they will save extra money wherever they can. Nearly a third (29%) say they will simply bide their time for property prices to recover.

LV research shows that that the largest number of over-50s (34%) believe it will take three to five years for house prices to return to their former value. This may explain why four in ten (41%) of those planning to use their home to boost retirement income feel they are still on track to retire as planned.