1 in 6 using pension lump sum for buy-to-let investment

1 in 6 using pension lump sum for buy-to-let investment

Thousands of people are prepared to use a pensions lump sum to make a buy-to-let property investment, new research suggests.


  • One in six people prepared to use a pensions lump sum are planning to make a buy-to-let investment
  • Average rental payments in the UK are now around £800
  • Buy-to-let investment may not be suitable for everybody who is approaching retirement. Download our free guide to find out if it can be suitable for your circumstances

Around 16% of people aged 55 and over and subject to new pension freedoms are planning to use a lump sum from their savings to make a buy-to-let investment.

The figures from Hargreaves Lansdown cited in trade magazine Property Reporter are indicative of the appeal of the buy-to-let sector, which has consistently offered returns that are far in advance of even the highest rate annuity.

According to many recent indices, the average rental payment in the UK is now around £800 – an income that many people believe could comfortably support their retirement.

The historic changes, which come into effect on April 6th, will allow the next generation of retirees to have full access to their life savings and, according to the research, around 200,000 people are set to brave tax charges and cash in their entire pot. The first 25% of any withdrawal is tax free, while the rest is charged at a marginal rate – between 20 and 45%.

Elsewhere, Jeremy Leaf, fellow of the Royal Institute of Chartered Surveyors, was another expert who believes that buy-to-let may be a popular retirement option, telling the BBC’s Today programme large numbers of people have already inquired about the possibility of a buy-to-let investment.

Despite buy-to-let’s popularity as an investment – and the large numbers of people currently considering it as a retirement option – individuals need to assess whether or not it is right for their personal circumstances.

Before seeking independent financial advice, you can gain an insight into buy-to-let and its suitability by downloading this guide.pensions 2015 buy-to-let


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