There's no place like home - or is there?

Posted on Apr 11, 2019

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For most of us, our home is our largest asset – so it’s no surprise that it’s something people consider when they are looking towards retirement - perhaps even regarding it as their ‘pension’, not bothering to invest money anywhere else.

It’s not unusual to think about downsizing at retirement, thus freeing up some of the equity in our property, while others might consider buying a second property.

Property can be a good investment, with house prices rising over recent years. In addition, if you decide to become a buy-to-let landlord, then not only do you have an asset to sell further down the line, but you can also benefit from the rent paid by your tenants.

That said, becoming a landlord can be time-consuming though and sometimes stressful. If you decide to invest your money instead and come to The Goodman Partnership for advice then, offering wealth management in Tunbridge Wells, we can take the majority of the stress and paperwork away from you.

There are some advantages to owning a property, rather than putting your money in a pension. With property, you can sell it whenever you feel like it – subject to finding a willing buyer at an acceptable price - and benefit from the money from that sale. If your money is in a pension scheme, then you can’t access it until you are aged 55. It’s important to bear in mind though that, with property, you might have to pay 18% or 28% in CGT (Capital Gains Tax) on any increase in the value of the property.

On the other hand, normally up to 25% of the accumulated pension plan value can be taken as tax free cash.  Most policyholders take the maximum available because they would like access to the capital so that they can spend it, gift it to children or invest it to receive an alternative stream of income.

In many ways, pensions are more flexible than property. Here at The Goodman Partnership, we offer regular reviews to ensure that your retirement planning strategy remains effective, relevant and up to date.  You also need to know how your investments are performing and be aware of changes to tax or other developments that might affect your strategy.

If you’re depending on property to be your pension, then you are simply relying on the property market at that time giving you the ‘return’ you are hoping for – you can’t benefit from an annual review to help you with that, with the flexibility to adapt, depending on current market conditions.

Unlike many of the ‘too good to be true’ pension investments we’ve warned you about in recent blogs, investing in property can be a positive decision – but as we always suggest, it’s not always good to keep all your eggs in one basket. As ever, we can give you advice on your wealth management and help you to establish what investments will work for you – both from a practical point of view and from a tax perspective too. 

Please do get in touch with us with any questions on tel: 01892 500600.


Goodman Chartered Financial Planners is a trading name of Fairstone Financial Management Ltd. Fairstone Financial Management Ltd., is authorised and regulated by the Financial Conduct Authority – FRN: 475973 Registered in England and Wales no: 05574120. Part of the Fairstone Group. Where you have a complaint or dispute with us and we are unable to resolve this to your satisfaction then we are obliged to offer you the Financial Ombudsman Service to help resolve this. Please see the following link for further details: www.financial-ombudsman.org.uk.