Should Pensioners Move Their Pension Pot into Buy To Let?

The Chancellor, George Osbourne, has changed the rules on pension drawdowns to make it easier for pensioners to have access to their money at retirement. The government believes that

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pensioners have as much right to their cash as anyone else.

Annuities Vs Buy to Let
The traditional way to handle a pension fund is pour the cash into an annuity, which then gives you a guaranteed monthly income for life. However, with the poor performance of many pension funds in recent years, annuities are no longer as popular as they once were and some pensioners are looking at alternatives ways to maximise their retirement income.

Using your pension pot to invest in buy to let property is now a lot easier as the rules on withdrawing cash from a pension fund have been relaxed, and with buy to let offering attractive returns on investment, many experts are predicting a huge swing from annuities into buy to let property. But is this a good idea?

Beware the Tax Man
Property investment is not for everyone. Income from a buy to let property is not always guaranteed and if the property is empty for a few months or it requires major repairs, pensioners need to think about how they are going to cover the costs. There are also tax implications and if the property is subsequently sold on, pensioners could be liable for capital gains tax, so it is a good idea to take professional advice before making the leap from an annuity fund into property investment.