Potential expat retirees choose property investment over employer pensions

Published:  23 Feb at 6 PM
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If you’re planning to retire overseas, you’ve a choice to make between investing in real estate or paying into a private pension.

For British retirees, the state pension is now insufficient to support a lifestyle in even the least expensive country popular with retired UK expatriates. Relying on capital to support your stay is risky, especially considering the rising cost of both private medical insurance and private hospital charges in countries formerly known for their reasonable costs.

A recent survey in the UK revealed an increasing number of those saving for their retirement preferred to invest in property rather than pay into a pension savings scheme, whether their investment was based on buy-to-let or capital appreciation. Just under 50 per cent of respondents believed real estate is a better bet than any employer pensions now on offer.

Backing up the initial survey results was a revelation from the Office of National Statistics (ONS) that the numbers of savers preferring an employer pension had fallen to just 22 per cent after rising to 26 per cent from 2010 to 2012. The ONS’s Wealth and Assets report suggests the reason behind the change in investor sentiment is a growing confidence in real estate prices. At the same time, figures show the popularity of savings accounts and ISAs is demonstrating a decreasing trend.

Even so, the UK state pension is the preferred source of income in retirement for 84 per cent of those surveyed, with personal pensions coming in at 68 per cent. Investments or straight savings finding favour with 44 per cent, property downsizing accounted for a further 23 per cent and an inheritance in the future appealing to 22 per cent.

Just half of respondents were confident they would enough cash to fund their retirement over and above their state pension receipts, and the 59 per cent of those still in work intended to retire between age 65 and 69. Only 21 per cent reported they believed they did not have enough financial backup for a comfortable retirement, with a further 39 per cent admitting they weren’t confident they’d have enough extra cash.
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