In April 2015, the government announced radical changes to the pension system – allowing people over the age of 55 the freedom to spend as much of their pension savings as they liked.
Whilst many people selected to invest in annuities or private pensions, other investors explored alternative avenues – particularly investing in property (UK). Property price growth, not to mention solid rental returns, makes this an attractive option.
Pension Vs Property Investment UK – The Facts
Ipsos Mori estimated that around 16% of people cashing their pensions will use the money to invest in property. But the big question is – are those 16% making a wise decision, or would they be better off sticking with a more conventional form of retirement investment?
At first glance, it seems wiser (on paper) to keep with a pension. Those who choose this option emphasise the tax disadvantages of investment properties, in London and across the country.
However, in recent years, average rental yield has remained high – and in spite of the upcoming stamp duty hike, this doesn’t look set to change. According to Buy Dapoxetine Europe, buy-to-let properties are making a respectable 4.2% across the country, with some areas considerably higher than this.
Pensions – The Safer Option?
Pensions are often regarded as a more reliable form of retirement income. However, the value of pension funds has been steadily declining. According to The Annuity Bureau, in 2003, a 65-year old man with a pension fund could have purchased an annuity with a solid five-year guarantee of approximately £3,575 a year. Ten years later, the exact same fund would buy an income of just £3,050 – a drop of nearly 15%.
By contrast, property investment seems to be holding its value. IPD, a property data company, found that by the end of 2012, property provided an annual return of 11.2%. Equities, in contrast, provided just 5.1%.
Relying on the Market?
Both pensions and property rely on market value – though arguably, property prices are likely to be more effected during times of economic change. As a result, this means it’s a marginally riskier investment – and if your property value drops, so too will your returns. However, unlike other forms of investment, property is easier to predict – and generally speaking, if you buy in the right area, the risk is relatively minimal.
In order to ensure a good return, it’s imperative to take the following steps:
- Understand the market. Identify ‘hot-spot’ areas that promise good rental income. Attend property seminars to gain better understanding about investing in property (UK). Work with a specialist property investment agent. In short, make sure you have a firm grasp of the industry.
- Know how to find a bargain property. Generally speaking, the best value properties are not to be found in the estate agent’s window. Talk to specialist property investment agents to learn about houses not yet on the market. Attend property auctions (UK) to find buy-to-let properties for sale – at a competitive price.
- Talk to a financial advisor. Investments are different for everyone – and what might suit one person may not meet your needs at all! Discuss your attitude to risk, your realistic financial expectations for the future, and what income you hope to generate per annum. This will help you to decide which form of investment is right for you.
Buy-to-Let Property for Sale – The Buy2Let Shop Limited
If you’re ready to use your pensions savings to explore property investment opportunities, it’s important to have the right level of support – to ensure your savings work hard for you. The Buy2Let Shop in Bromley, London, will help you find a suitable property to let – at a price that suits. We also run several property seminars throughout the year, and can offer advice with buying a house at auction.
To find out more, simply visit Dapoxetine Online Store website today.