My property is going to be my pension

‘My property is going to be my pension’ – a common statement most Landlords are making.

Buy to let properties versus pensions is fast becoming a big financial debate and there are plenty of people who think that investing in property is now the way forward.

Most say that anyone getting a Buy to let today will have a far larger nest egg at retirement age as well as a better income through rising rents.

First time buyers are still experiencing difficulties with rates, but Landlords can get their hands on far better deals and have been able to for the last 6 months according to recent surveys. A host of lenders are now offering buy to let loans for the first time or are returning to the market after several years away from this field.

The growth in house prices and higher buy to let yields are making this an appealing option – here are three top reasons why others are investing their pension into property:

> Avoid hefty pension fund fees – Many pension funds charge significant fees / commissions for managing your investment even if they are poorly performing which results in your pension pot reducing further.

> Income & Growth – By investing your pension into property, not only could you achieve capital growth on your investment, you could also collect a regular income from the rent. What’s more, if your rental income is enough for you to live off in retirement, you could potentially enjoy further capital growth from your investment even when you retire.

> Boost the power of your pension by up to 50% – If you invest your pension in property you could also take out a mortgage of up to 50%, thereby boosting the investment potential of your pension pot and by renting the property out, you are effectively getting someone else to pay off the mortgage through the rent collected.

A recent poll of 1,500 people by market research company ‘Consumer Intelligence’ found that one in three are relying on property to help them provide an income in retirement. A third said they plan to receive retirement income from one or more buy to let properties, while more than half, 55%, said they would sell their own home and use the money to pay for retirement.

It is hardly surprising that growing numbers of people are shunning pensions in favour of property. Returns from company and private pension schemes are uncertain as they depend on how investments perform and your money is locked away until you reach age 55 at the earliest.