Independent Financial Life Planners Bishop's Stortford: Is it wise to put your pension into a buy-to-let?

Thursday, 7 May 2015

Is it wise to put your pension into a buy-to-let?

At the turn of the year it was reported that almost half of all London retirees 47 per cent were planning to use their pension pots to invest in buy-to-let property. And a Bank of Ireland study showed that 29 per cent of retirees nationwide were looking to use the new freedoms that have just come into effect to buy property and generate rental income in retirement. In total it was estimated that nearly half of all Britons who are not landlords are interested in trying to enter the buy-to-let boom within the next two years.

That is a huge number of people but despite such widespread interest, the Bank of Ireland also found that some 30 per cent of potential landlords did not understand the tax implications of rental income. Bank of Ireland UK mortgages commercial director Mark Howell said: “Our research has identified a massive knowledge gap in the area of buy to let mortgages, which is particularly concerning as the market is currently experiencing growth. “It’s important that people seek financial advice on tax matters before making big financial decisions or investments, like buying a property to let.”

It is important to clearly understand the tax implications of a buy to let if your take for example £100k out of a tax sheltered environment like a pension and then invest in something liable to Capital Gains Tax and Inheritance tax in turn making it more of an illiquid asset. Whilst BTL may work for some, the tax and cost implications of BTL can be worrying and it has to be remembered that the BTL market is significantly less regulated than the pension market. Enable’s IFA’s can help you look at what is right for your individual pension investments.

Issued by: Enable Independent Financial Life Planners,  25c North Street, Bishops Stortford, Herts CM23 2LD Telephone: 01279 755950 - Fax: 01279 657339.  Enable Independent Financial Life Planners is a trading style of Enable Independent Limited is authorised and regulated by the Financial Conduct Authority. It is important always to seek independent financial advice before making any decision regarding your finances. If you would like any assistance, please contact us. NOTHING CONTAINED IN THE ARTICLES SHOULD BE CONSIDERED AS GIVING INDIVIDUAL FINANCIAL ADVICE

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IFA Bishop's Stortford

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