Over half ‘would consider’ BTL in retirement

The research among over-40s found strong support for saving into pension with 78% of retirement savers happy they have taken out pensions – but there is widespread disillusion with 15% of savers regretting their pension investments and 6% unsure.

However the research revealed growing interest in alternatives to pensions such as buy-to-let that increased flexibility on retirement savings are making potentially more attractive.

Around 53% of retirement savers say they would consider investing or are already investing in buy-to-let to increase their income in retirement. Nearly one in 12 (8%) of over-40s say they are already investing in buy-to-let while another 45% say they would consider it.

However over 55s are slightly less likely to consider investing in buy-to-let – around 48% would do so with 8% saying they are already landlords.

Pension freedoms allowing over-55s to take their defined contribution fund as cash subject to tax rates could be a major source of funds for buy-to-let, the research found. Around half of potential buy-to-let investors say they would use their pension fund to start as a landlord or to expand their portfolio.

Steve Griffiths, Head of Sales and Distribution at Kensington, says:

“The launch of pension freedoms has led to a lot of excited talk about the potential boost for buy-to-let with thousands of retired landlords rushing to set up in business.

“With so many people unhappy with pension saving there is a need for alternative approaches but buy-to-let will not be right for everyone and anyone planning to do so needs to get advice from a broker as well as advice on other issues including tax.

“The fact is buy-to-let is already a strong and growing market with more than 1.63 million mortgages worth around £188 billion representing around 14% of the total mortgage market and there is plenty of advice available as well as lenders willing to lend.”