04 Oct 2017

Over-50s 'help keep the UK buy-to-let market buoyant'.

Over-50s 'help keep the UK buy-to-let market buoyant'.

The over-50s will help keep the UK buy-to-let market buoyant, according to retirement-income specialist Retirement Advantage.

It says new research reveals that 13% of people aged 50 or over are likely to invest in property after they retire. 

This could create 1.3million landlords who consider property a safe bet when the time comes to access their pension wealth.

Key reasons for considering buy-to-let include the prospect of capital growth as well as providing a regular income (50%), or to boost income in retirement (44%). 

More than a third of the over-50s think property is a safer place for their money than investing in stocks and shares. A similar number also think it provides better returns than leaving the money in their pension or putting it in the bank.

Nearly a quarter of over-50s have already experienced success at being a landlord, while 18% said they were interested in residential property and would enjoy the process of rental management.

Things to consider

Andrew Tully, pensions technical director at Retirement Advantage, said: "The buy-to-let market looks set for a boom fuelled by the pension freedoms and in the process will create a new generation of landlords. As a nation, our interest in property remains despite a cooling of the buy-to-let market following recent tax changes.

"There are a number of things to consider before embarking on a career as a landlord. 

"People will need to think long and hard before withdrawing significant sums of cash from their pension, as any withdrawal over the first 25% is subject to Income Tax.

"If your main priority is to generate an income, then the rental yield from the property may not provide the income you expect. Don’t forget you will also have to manage the property, or pay someone to do so on your behalf.

"With most people’s main asset being their home, the old adage of having all of your eggs in one basket has never been truer when it comes to pensions and property. Most experts will advise that a diversified investment portfolio is more likely to deliver the retirement outcome you planned.

"As ever, seeking professional financial advice is key to avoid potential bear traps and make the most of the pension freedoms."

Pension advice

Aberdein Considine’s independent financial advisers - who are authorised and regulated by the Financial Conduct Authority (FCA) - can guide you through the pension maze and help you tailor a plan to your circumstances.

To find out how we can help you, click here.

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