Pensions and Property

Today we will take a look at pensions and property - what they have in common, where they differ and why some strategies are more suitable than others when planning for retirement. Some clients see their property (or property portfolio) as their pension arrangement and therefore do not see the need to start a pension plan or keep contributing to an existing scheme.

On the surface, property values, broadly speaking, follow a general upward trend, so the logical conclusion is that there is either an equity waiting to be released or substantial capital gain to be realised.

Sounds good, doesn’t it? Almost an ideal investment then - in simplistic terms, you buy an asset for x-amount, wait a few years or decades and hey presto - huge gain in the form of a lump sum to be had. Well not so fast - a slump in the housing market or a downward trend in property prices can be a real thing, and if it does happen that could mean a slide into negative equity.

What about ‘part time’ landlords with a couple or more properties? Surely, the rental income pays for the upkeep of the property, covers the mortgage, and maybe even generates a healthy income stream. So why is buy-to-let not the best retirement income strategy? Void periods, less than ideal tenants and numerous tax changes in recent years, have meant that this type of asset should not be relied upon to provide secure income. The illiquid nature of bricks and mortar means that it could take a long time to sell, or worse, not sell - or even worse, sell at a loss.

What if you could use property as an investment for retirement, without all the hassle and headache of physically owning the property or properties? Options for indirect property investments come in many guises, such as Real Estate Investment Trusts, Property Unit Trusts, Property Investment Trusts among many others - this could be a means of generating income or capital growth depending on your objectives, within a diversified portfolio. Your independent financial adviser will be able to assess the suitability of any such investments with regard to your risk profile and capacity for loss.

For comparison, to reflect the level of risk, the yields tend to be higher than bonds or gilts, but do remember that investment values can go down as well as up.

As we can see from the above strategies, whilst having their place in the context of a solid financial plan, the scope for providing retirement income is somewhat limited. With many of us living longer than before, it is of paramount importance that we seek income that is sustainable for potentially a very long time. This is particularly the case if property is your preferred choice, it goes without saying that it’s imperative that you seek independent financial advice to make sure that any retirement strategy is the correct one for you and your circumstances.

To sum up, property - whether it’s in a physical form or as an investment counterpart - could present an option for your retirement income strategy. However, best not to try DIY in either sense of the word!

If you would like to discuss any of the above, please contact us and we will be happy to help.

Silvia Johnson BSc(Hons) DipPFS EFA CertCII (MP) is a Director & Independent Financial Adviser at Royale Thames Wealth Ltd.

www.royalthameswealth.co.uk silvia@royalthameswealth.co.uk 020 8720 7249 / 07908 109 741

Royale Thames Wealth Ltd is an Appointed Representative of New Leaf Distribution Ltd which is authorised and regulated by Financial Conduct Authority number 460421.

The value of your investment may go up as well as down and the value is not guaranteed. Past performance is not a guarantee of future performance.

Wills and Estate Planning are not regulated by the FCA.

Viva Retirement Solutions

Hello, having lived in Chelmsford for the past 8 years and always enjoyed reading The City Times, and I thought it would a be great place to share my thoughts and knowledge around the lifetime mortgage market.

I haave always worked in finance, and back in 2019 there was a big change for me. I wanted to start working from home and help my wife with our new baby, so I became fully qualified as a lifetime mortgage adviser and secured a position with the multi-award winning broker Viva Retirement Solutions. This was the best decision that I could have made and I haven’t looked back since. I have helped so many clients throughout Essex and across the country to fulfil their retirement needs.

Whether it be paying off an existing mortgage, moving to a new house, or home improvements or help the children, the lifetime mortgage has become a really flexible product that can benefit so many people aged over 55 in many different ways. Contrary to the myths, you can make flexible voluntary repayments, you retain full ownership of your house, and inheritance can be left to family, and you can move house if required.

All of our clients are different and I really enjoy listening to their needs and guiding them in the right direction, even if that means saying a lifetime mortgage is not quite right for you at this current time. If you would like to discuss this and your potential plans in more detail, then please don’t hesitate to contact me - see our advert on the opposite page.

Shaun Tillyer Equity Release Specialist

Viva Retirement Solutions

07771 590 015 shaun@vivaretirementsolutions.co.uk www.vivaretirementsolutions.co.uk

Rambling with the RAF - By Britain’s

When will RAF grownups stop acting like children with a new board game containing the keywords, ‘diversity’, ‘equality’, ‘inclusiveness’ under a Diversity and Inclusion Directive? Utter nonsense of course, and a slap in the face of RAF veterans.

Which bright spark dreamed up the current fantasy recruitment quotas, which I understand will target 40% women by 2030, 20% from ethnic minority backgrounds, but 0% white males?

Three cheers for the head of RAF recruitment, Group Captain Lizzie Nicholl, who has reportedly stepped down from her post - her resignation a rare act of defiance. Unfortunately, it became clear that the Royal Air Force had broken employment law with its recruitment policy to prioritise female and ethnic minority candidates over white men.

Quotas rarely work and can be interpreted as a sign of desperation. Publicising quota targets immediately creates pressure on those luckless souls charged with meeting those targets. The idea that jobs, position and promotion are best allocated solely on merit and ability, regardless of background, are being replaced by a new religion, almost a fanaticism that elevates diversity and inclusion above all else, but sadly has been swallowed whole by the RAF. The RAF should have nothing to do with ‘quotas’ and those who have created them should be ashamed - as should the head of the armed forces Sir Tony Radikin when under his tenure the RAF had taken steps to become more inclusive, such as replacing the term ‘airman’ with ‘aviator’ and embracing gender-neutral pronouns in signatures. Air Chief Marshal Sir Mike Wigston, Chief of Air Staff, has a lot to answer for regarding the RAF’s diversity mess.