The Pension Freedom Act gives the over 55’s access to all their pension savings in one go

As of April 2015, the over 55’s can withdraw their entire pension savings in one go, subject to marginal tax rates, but with the first 25% tax free.

This opens up a variety of new opportunities for retirement planning, including investing in the buy-to-let market.

With building society returns and annuity rates at historic lows and rental incomes providing a stable and increasing return, property could provide an effective means of supporting you and your family up to and during retirement.

But, while buy-to-let can be a sound purchase, retirees need to ask themselves whether the benefits outweigh the amount of time, effort and risk that is required.

What has changed with the Pension Freedom Act?

From April 2015, the pension reforms brought in as part of the 2014 Budget have given retirees more choice over how they spend, save or invest their money by giving them the opportunity to withdraw all their savings in one go if they choose (more details of the changes can be found here: http://www.pensionsadvisoryservice.org.uk/about-pensions/pension-reform/freedom-and-choice).

For many savers, annuities will continue to be the most appropriate method used to fund their retirement, however for those with larger pension pots and a greater appetite for risk, the reforms offer them the flexibility to improve their retirement prospects and maintain their standard of living or help support their families financially.

Why invest in the Buy-to-Let market?

With house prices continuing to grow, an increasing population and restrictions on mortgage lending, buy-to-let income looks like an appealing option to fund retirement for many. An average 4.2% yield compares favourably with rates on cash deposits further broadening the appeal of buy-to-let as an investment.

However, the Chancellors 2015 Autumn Statement brought in an increasing number of restrictions on buy-to-let investors.

Most noticeably a 3% stamp duty premium was applied from 1st April 2016, so would-be investors need to consider this for purchases after this date (use this calculator to see the difference in pre April 2016 and post April 2016 stamp duty costs: https://www.stampdutycalculator.org.uk/stamp-duty-buy-to-let.htm) .

What do you need to do?

You will want to maximise your return from your investment and to minimise your costs. A step to doing this is to minimise the purchase costs. To take a step towards this, then get a cheap, instant, itemised conveyancing quote for your buy to let property by clicking here