Property investment as an alternative to a private pension

A growing number of Britons are choosing to forgo pensions in favour of alternative forms of investment for their retirement nest egg, including buy-to-let property and ISAs.

That is according to the Telegraph, which suggests that these investments are growing in popularity, even though they offer much less generous tax relief on private wealth than pension contributions.

It cites figures from the Department for Work and Pensions indicating that pension saving was at its lowest level in ten years during 2009/10, with just 38 per cent of people putting money in a plan, compared to 46 per cent a decade earlier.

"With stock markets subjecting investors to stomach-churning volatility, poor returns on most asset classes and a steady decline in annuity rates, it is perhaps no surprise that fewer people are saving in pensions," pensions expert and finance author Jonathan Greenwood wrote in the publication.

"Residential property valuations may have been struggling since the financial crisis, but, despite this, buy-to-let has still managed to fare better than many other asset classes over the past decade."

According to McKinsey Global Institute, shifting pension regimes and the growing popularity of alternative investment classes are two of the factors behind its projected fall in the significance of equities over the next decade, together with an increased focus on emerging markets, where these investments are less prominent.

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