This year has marked a new era in pension freedoms. Those 55 or over are meant to be able to freely access their pension pots (defined contribution, not final salary ones). This will empower some, or could create a whole new set of dangers. Why is that?
We are already seeing headlines like one in five over 55s have been targeted by scammers. Research by Retirement Advantage found that 17% of over 50s and 20% of over 55s have been approached by a company offering to help them access their pension early, for instance through legal loopholes or a one-off investment opportunity. It highlights the challenge facing pension holders who are nearing retirement.
And then there are the headlines such as ‘Only one Briton in 100 is truly financially savvy’. According to research by the Office for National Statistics (ONS), individuals did best at making ends meet and least well at planning ahead for a ‘rainy day’ or big spending commitments. A large proportion of people scored zero on staying informed about matters such as tax changes, inflation and interest rates.
People may be trying to bury their sorrow at having to retire later and want to make the most of their time now, but this may leave them a bit exposed and vulnerable to being misled. This is rife territory for being swayed by the ‘Get-Rich-Quick’ brigade.
The ONS findings did have some positive news, in that employer-based pension schemes were considered as the “safest” way to save for retirement. And this is one pension pot which is more protected by the recent changes in legislation. Investment in property was also increasingly seen as a safe way to save for retirement. But 59% of individuals said they were not confident of having enough income in retirement to maintain the standard of living they were hoping for. Herein is the crux of the matter.
Role of property investment in pension planning?
People want to make decent provisions for themselves in retirement, but this means choosing the right investment for you, the investor, not what is right for the person trying to sell to you.
With unparalleled opportunity to tap into pension pots, there is scope for newly-empowered pension-holders to make some irreversible, bad decisions. Whether that be rushing headlong into buy-to-let opportunities, which may not be appropriate for the individual concerned, or not doing proper due diligence on an overseas holiday home. Using an agent which is more established and is a member of a professional body like the Association of International Property Professionals (AIPP) helps.
Want to read more about the Industry Body’s view?
Download the AIPP guide here, on the right >>>>>>>>>>>>>>>
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Property Venture® is an award-winning, UK-based agency for overseas property who helps people buy investment property and holiday homes in Europe, more easily and safely than they can on their own, because we offer grounded common-sense advice.
The focus is mainly greater Europe: Poland property, UK investments, Spain property, Turkey property, Cyprus property
On the Advisory Board and a Member of the Association of International Property Professionals (AIPP) the business has been vetted, approved and voluntarily commits to Industry Regulation and the Professional Code of Conduct. We are known for our quality customer service and non-pressurised approach to sales. Take a look at what our clients say
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This blog post is for information only and should not be construed as financial adviceProperty Venture® is not a member of, nor regulated by, the Financial Conduct Authority. Past performance is not an indicator of future performance and should not be relied upon when making an investment decision.