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Insight & Opinion

Only 5% of landlords plan to use new pension freedoms to expand their portfolio

Author: Gemma

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New research from the National Landlords Association (NLA) shows that the majority of landlords do not intent to use new pension freedoms to expand their property portfolio.

Pension reform

Since April 2015, savers over the age of 55 in the UK have been able to access their pension pot. Savers can spend their pension as they see fit however, tax implication do apply.

Read Experience Invest’s exclusive pension reform guide written by Money Marketing’s Thomas Selby.

Data collected in the Q2 2015 NLA Quarterly Landlords Panel research shows that out of the respondents with a pension in place, only 5% of them plan to withdraw cash for property investments.

Out of those surveyed, 14% of landlords plan to withdraw a lump sum in the future to expand their property investment portfolio. 11% of respondents said that they didn’t have enough money in their pension pot to buy more property, 7% of landlords have other plans for their savings and 19% were undecided.

The research from National Landlords Association show that many landlords have different plans for their property portfolio for their retirement.

3% of respondents plan to sell up, 19% have no plans in place, 25% plan on selling some of their properties, 61% plan to live off their portfolio income upon retirement, and 34% plan to assess their portfolio when they reach retirement age.

“There has been a lot of talk around pensions being used to invest in buy-to-let (BTL) since the announcement on pension freedoms was made last year. While the changes may be attractive to those considering a move into BTL, it’s clearly not that popular an option for landlords,” Carolyn Uphill, Chairman of the NLA commented.

“Those currently in the market already have an asset to use if they want to expand – their property – and therefore, depending on circumstance, will have the means to put a lump sum towards other investments or plans; that is if they want to withdraw it at all.

“The NLA offers invaluable advice, guidance and support for both existing and new landlords to help ensure the smooth and successful running of a letting business. It would be advisable for anyone considering or already planning on using a lump sum from their pension for investment in BTL to look into how the NLA can help.”

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