Pensions and property: why 2015 is the year of the 'silver' investor

Dec. 18, 2014 - PRLog -- As of 6th April 2015, retirees can dip in and out of their pension pots - effectively using them like savings accounts. Having ready access to large sums of money is expected to encourage the 'silver' generation in invest in property, with houses and flats for sale in south west London a prime target.

Up until 6th April 2015, pension holders have to buy a pension annuity, which guarantees an income for life from the money that has been accrued in the pension pot. Rather than a lump sum, the money is released like a wage. The new rules, which were announced by the Chancellor in the 2014 Budget, will allow retirees to withdraw chunks of cash to spend how they wish (every sum taken qualifies for 25% tax free).

So why invest a pension pot in property and not blow the lot on a fast car or a year-long cruise? People are living healthier lives for longer and often require an income once they have given up work. Investing in property and earning money as a landlord is an option to explore. Additionally, recent indications from the Bank of England suggest that interest rates will remain at their historic low level of 0.5% for some months yet, with some forecasters predicting a rise may be as far off as summer 2015. Although great new for borrowers, this is crushing news for savers who expect to live off interest on their savings post-retirement.

Pensions themselves are often shrouded in mystery and hard to understand, which makes an investment in property more appealing, say Winkworth south west London estate agents. Most retirees will understand the property market already - whether they have been an owner-occupier or tenant during their lifetime.

Buying a property to rent out is feasible post 60. As well as changes to pension pots, mortgage lenders are often willing to issue buy-to-let mortgages to those over 60 with the right deposit and conditions, although the lender will usually expect to be paid back by the time the borrower is between 70 and 75 years old.

Property for sale in south west London, where the rental demand remains high, has become an appealing prospect for older generations who want their money to work hard for them. There are two options: buy a property outright or put down a deposit and fund the rest of the purchase with a buy-to-let mortgage. In both instances, there will be income generated from the monthly rent as well as appreciation prospects relating to the value of the property

Winkworth south west London estate agents (http://www.winkworth.co.uk/regions/south-west-london) will be happy to advise retirees on the local rental market and purchase prospects ahead of the 6th April pension change.