WHY PROPERTY SHOULD BE IN YOUR PENSION PLAN
The difference in income potential of those at pension age that have invested in property when compared to those that have relied on retirement income alone is stark.
Pension aged savers, those aged 55 and over, have seen their property wealth rise over the past decade or so at very healthy rates, even more so recently with the Government aid relating to stamp duty and budget measures encouraging further activity in the market.
Retirement income itself however has remained relatively stagnant. Those over the age of 65 that purchased property saw, on average, a £561 monthly increase in wealth or a growth of 58 percent over the past 11 years. This equates to £90,420 growth per household, whilst the average pensioner income has only increased by £12 a week, or roughly £50 a month over the same 11-year period.
Savers are therefore being urged to consider releasing some equity from their pensions to invest in a secure asset such as property.
The benefits of brick and mortar
Incorporating a property investment into your pension plan is going to help your money go further. The benefits of a property purchase are seen in both rental returns and capital gains able to be achieved.
Selecting the right property for your investment will be essential in ensuring that you maximise your returns here. The type of property, location and consideration of future price growth is important, amongst several other factors.
The buy to let market is booming right now. The average rent on a newly let home is 4.4% higher than it was in March last year, with this rising to 6.8% in key hotspots in the North, areas that Sequre are currently focussed in. With a growing shortage of rental property in key residential areas, landlords are expected to realise even greater yields and lower void periods going forwards.
Sequre are specialists in securing high yielding buy to let investment opportunities – click here to see a video tour of a recent project. Contact us here to find out more information about investing.
House prices are also rocketing in value, with average annual house price growth reaching 10%. For perspective, the average value of a home has increased by £30,000 across the UK over the past year, even more so in these key areas across the UK. With both consistent (and rising) rental returns, coupled with this increase in property value, there has never been a better time to invest.
The benefit of a property investment over alternative investments in stocks and shares is that it is a tangible asset. If your financial situation changes, you can opt to sell at a greater value than the property was purchased at.
If you are in discussion with your IFA or accountant, it may well be worth discussing how to incorporate a property investment into your pension plan, as it often fits well.
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