Radical changes to the rules in respect of pensions are being introduced in April 2015. These are the most significant changes that have been made to pensions in many years. The key change which has attracted headlines is the new flexible access to pensions from the age of 55 giving you the choice, in certain circumstances, as to whether you take a lump sum, regular lump sums or an income from your pension.
These options all have tax implications and you would need to be independently advised as to the option that is best for you.
Should you decide to withdraw funds from your pension pot then you may wish to consider purchasing a “buy to let property” to generate an income for you and, hopefully with bricks and mortar, maintain or increase the capital value of your investment.
This is also the time of year where older children are considering their futures and may be looking to move away to undertake further education and will therefore be incurring accommodation costs. It is worth considering buying a property where they are going to study for them to live in, with the additional potential for an income source from other students who may wish to house share/rent a room.
These options are certainly worth considering if withdrawing funds from a pension pot. You would of course need to consider the tax implications for owning a property which is not your principle private residence, receiving rent as part of your income and the various issues around tax relief on the associated expenditure of mortgage interest and ongoing maintenance costs. However you may feel that this is a more secure and better investment than retaining funds in a pension scheme.
Alternatively you may just be carrying out a general review of your property requirements in the run up to your retirement. Do you live in a property that is now too large for your needs, too costly to run or in need of repair and maintenance? Would you like to live closer to other family members or perhaps within walking distance of shops and amenities? Perhaps you should consider downsizing from your current home and finding a property that better suits your needs before even considering withdrawing funds from your pension. The equity you release from such a sale may help you with your future plans without leaving you without a future income or with a sizeable tax bill.
If you would like advice on buying and selling a property at whatever stage in your life, Alan Williams can be reached at:
Telephone: 01622 689700
Gullands Solicitors
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