50,000 people to use pension reforms for property investment?
03-15-2015
Experts believe that tens of thousands of people approaching retirement age are intending to secure buy-to-let assets.
Summary:
• The most significant pension reforms in a generation come into an effect in less than a month
• Tens of thousands of people are assessing the suitability of buy-to-let as a retirement option
• People should resort to logical investment criteria to ensure they have enough income to see them through retirement
It is less than a month until what George Osborne has called the biggest pension reform in over a 100 years.
On April 6th anyone over the age of 55 will have the option of spending their pension pot as they wish – rather than being forced to by an annuity as the case has been in the past.
As the UK’s private rented sector is currently offering record levels of return, many investment experts believe people approaching retirement will aim to secure a regular income by making a buy-to-let property investment.
Mark Hayward, Managing Director of the National Association of Estate Agents, said: “There are no doubts we will see a feeding frenzy, with many of those with large pension pots cashing in their lump sum and putting it straight into property.”
He explained that there is an undersupply of housing in the UK and prices could rise as a result of the huge investment influx.
Financial firm Hargreaves Lansdown has already predicted that 50,000 of the 400,000 people approaching retirement age are planning to invest in property, while Neil Lovatt of Scottish Friendly, expects the new pension rules to bankroll a generation.
If you are approaching retirement, then it’s important to remember taking any of your pension benefits early will have an effect on your income at retirement.
Therefore, pension release should not be seen as an easy option for raising cash. Whatever you decide to do with your pensions pot, always seek impartial and professional advice and be confident in your investment logic to ensure you have enough money to see you through retirement.