Around 3.2 million Brits are planning to use property as their pension fund when they reach retirement, it has been claimed.

Baring Asset Management said that ten per cent of people aged between 35 and 44 wanted to retire on the income generated by their property, with eight per cent of those aged between 45 and 54 intending to do the same.

People aged between 25 and 34 were the least likely to see property as a pension, with six per cent admitting they planned to use money locked up in their property to provide for their future but Barings'' chief information officer, Marino Valensise, advised against banking solely on property.

"Pensions should be invested in diversified assets that are in line with age, lifestyle commitments and number of years to retirement" he said.

Ian Naismith, head of pensions at Scottish Widows, commented that while investing in property has "some validity", people should remember "it''s best not to put all your eggs in one basket".

"Property has done well recently but it may not do in the future. It is a worthwhile investment but if people are relying on it exclusively, they are taking a big risk," he warned.