Pensions and property

Enable’s IFA’s in Bishop’s Stortford and Saffron Walden have long suggested that for long term financial planning, rather than putting all your eggs in one basket savers should have a balanced portfolio of investments, of which property of course should form a part.  In a speech delivered recently by the City watchdog's (FCA) boss, Andrew Bailey, cautioned the idea of investing too much of one’s retirement fund in property.

His comment seem to directly challenge some of the more recent calls made by Andy Haldane, the Bank of England's chief economist, who has suggested that property is a better option for funding retirement than a pension. Mr Haldane had previously also admitted he could not make "the remotest sense of pensions" because they are too complicated.

Fresh data reveals the property wealth of over 65s in Britain has surpassed £1 trillion for the first time.  Key Retirement’s Pensioner Property Index reveals pensioners who have paid off their mortgages have gained on average £19,120 tax-free in the past three months taking their property wealth to a new record high.  Jon Greer, a pension’s technical expert, at Old Mutual Wealth, says “Housing wealth can be an important part of the mix when it comes to retirement income. But treating your house as your pension is a major risk. “Putting all your eggs in one basket is never a good idea, particularly when you consider that unlocking value in property is not straightforward.

Interestingly Halifax data shows the average home has risen in value by 231pc over the past two decades, while ABI data shows a typical pension fund has made 211pc investment growth over the same period. Enable’s IFA's in Bishop's Stortford can try and help you get the balance right.

http://www.telegraph.co.uk/news/2016/09/16/city-watchdog-chief-warns-against-using-property-as-a-pension/