10 October 2014

Not quite as safe as houses

Amanda Downie, Financial Planner at Carbon Financial Partners was recently asked to comment on an article by Jeff Salway in Scotland on Sunday. The article, which appeared in the paper on Sunday 28th September, was prompted by George Osborne’s announcement in the 2014 Budget about changes to pension rules, as well as a recent survey which revealed that more than one in six people of working age plan to fund their retirement by either selling or renting a property.

The article serves as a cautionary note to people intending to drawdown all of their pension pot simply to invest in property. As Amanda rightly highlights in the article, relying on property to fund retirement is extremely risky as you are not only exposed to the volatility of the property market itself, but unless you can spread the risk by buying several properties, then your retirement would depend on the success or otherwise of a single asset.

The article points out other risks amidst fears that many people will be tempted into this kind of investment when the pension rules come into force in April 2015.

We strongly advise anyone thinking about this kind of investment strategy to seek professional advice before deciding how to proceed. There are many investment options and opportunities that should be fully explored before taking any action.

Commenting on the property investment option, Amanda also points out that withdrawing from a tax-advantaged scheme to reinvest in a taxable investment doesn’t seem sensible. Further reinforcing the need to seek proper advice about your pension options.

It is a very interesting and informative article which you can read in full here.

If you want to discuss your financial plans or investments, email us at or get in touch on Facebook, Twitter or LinkedIn

You can view Amanda Downie’s profile here.

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