Up to 45% of over-40s would consider buy-to-let to boost their retirement income

16th April 2015


More than one in five Britons, at 21%, either regret or are unsure about saving into a pension to fund their retirement despite the launch of the new freedoms, research has claimed.

The analysis from specialist mortgage lender Kensington however showed a growing interest in alternatives to pensions such as buy-to-let.

It found around 53% of retirement savers would consider investing or are already investing in buy-to-let to increase their income in retirement. In addition, nearly one in 12, or 8% of over-40s say they are already investing in buy-to-let while another 45% say they would consider it.

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.

The research showed the over-55s are slightly less likely to consider investing in buy-to-let but around 48% would do so while 8% are already landlords.

Steve Griffiths, head of sales and distribution at Kensington, said: “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 1.63m mortgages worth around £188bn representing around 14% of the total mortgage market and there is plenty of advice available as well as lenders willing to lend.”

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