The number of people set to use buy-to-let investments to help provide retirement income is set to almost double, new research suggests.
YouGov surveyed 1,536 50 to 75-year-olds on behalf of investment and pension provider Old Mutual Wealth and found among those approaching retirement, 11 per cent planned to use buy-to-let to help fund their retirement, compared with only six per cent currently.
The survey findings, published on 9 February, come ahead of a radical change to the way people can take defined contribution pension savings from April this year. From the age of 55, pension savers will be able to take their whole pension fund in one go, or in a series of lump sums, instead of having to buy an annuity as before, although they can still choose that option.
Some commentators have suggested that the new pension freedoms could trigger a surge in the number of retirees choosing to invest in buy-to-let properties. Research from the Bank of Ireland, published on 11 February, found that 41 per cent of pensioners planned to take a lump sum to buy a property or to pay off their mortgage on retirement.
Meanwhile, the YouGov research also revealed that among people yet to retire,15 per cent said they planned to downsize to a smaller property to help pay for their retirement.
Clare Butcher, an associate solicitor at Palmers specialising in residential property, said: “Making the most of the new ways to access pension savings will involve some big decisions and in addition to the government’s free Pension Wise guidance service, most retirees will find they need additional advice to help them make informed and confident choices.
“For retirees who do decide on property-related options – whether that involves investing in buy-to-lets, downsizing or relocating – our experienced property specialists will provide expert advice and support throughout the purchase or sale process, to help protect our clients’ interests, as part of our fast and cost-efficient conveyancing service. For more information, please contact our Property team.”