Pension providers are expecting a surge in interest after rules change to allow retirees to invest in buy-to-let.
- Pensions providers are expecting a surge in interest following reforms
- Property investment has been cited as a popular new alternative to an annuity
- Experts have stressed the need for people to take their time and choose the correct investment option for their circumstances
Pension providers believe the amount of people inquiring about their pensions will increase by 40% next week, as new rules come into effect.
From April 6th, the government will allow anyone over the age of 55 to have full access to their pensions pot for the first time. This, coupled with the strong performance of the UK’s buy-to-let sector, has led many people to believe that thousands of people will make a property investment to support their retirement.
The Guardian reports that almost all of the UK’s 12 major pension providers have employed extra staff to answer calls and cope with demand next week.
In fact, Scottish Widows is expecting up to two years’ worth of inquiries over the next quarter, while Royal London is preparing to take 14,000 calls next week – an additional 4,000 to the amount it would usually expect.
Despite the anticipated influx of pensions activity, experts have stressed the importance of making the correct decision, with a spokesperson for Scottish Widows stating: “We strongly recommend that customers take their time and not rush these decisions too quickly given the complexity and risks involved.”
Even given the performance of the UK property market, it is important to remember that buy-to-let may not be the ideal retirement solution for everybody who is subject to the new pensions freedoms.
You can learn about more of the complexities of buy-to-let and pensions by reading our free publication on the subject.