60,000 people use pension freedoms
Over £1 billion has been withdrawn from pension funds over the last two months.
Chancellor George Osborne announced to the House of Commons last week that an estimated 60,000 people had already taken advantage of the pension freedoms that came into place on the 6th April. The changes to pension law have allowed anyone over the age of 55 to access their entire pension pot and be taxed as if it were income once withdrawn.
It has been suggested that individuals may be cashing in smaller pension pots as a means to avoiding tax charges, whilst those waiting to reach the minimum age of 55 are anticipated to withdraw larger sums to invest elsewhere.
Experts have long predicted that buy to let activity would increase significantly as a result of the pension freedoms and Sequre’s own research found that over 55% were considering property instead of continuing with the traditional route of annuities.
Comments From Sequre
Managing Director of Sequre Property Investment, Graham Davidson, comments on the new data:
“There was a lot of speculation leading up to the pension freedoms as to whether individuals would actively make use of the changes available to them. Looking at these figures, after just two months it’s quite clear that it has been an extremely beneficial advance across the board.”
“Many property investors benefit from much greater returns by putting their money into bricks and mortar as opposed to a pension. Buy to let has long been known as the best performing asset class with returns hitting 1,400% whereas ISAs only see 96%, so for those looking to gain an income throughout their retirement, there’s no question that property is the way forward. Those over the age of 55 who are considering cashing in their pension should be aware that property can provide a healthy income at a much better rate than annuities. We would strongly recommend our investors look out for the best yields, averaging 7-8% and in a good location that won’t allow for long void periods. As long as this new wave of landlords do their research in terms of where to invest and what type of property to look out for, they can benefit from a high earning, tangible asset.”
We offer a range of services and our property consultants are more than happy to talk you through our current investment opportunities. We can also recommend professional mortgage advisors to help you on your buy to let journey. If you’d like to discuss how best to utilise your pension, call us today on 0800 011 2277 and request your free guide to investing your pension into property.