Property purchase stats for over 55’s
Research by Insurers Prudential says that its figures suggest that involvement by householders currently over the age of 55 will account for more than three million property transactions, worth a total of more than £775 billion. Investing in property remains popular with the over 55’s says the insurer, the average maximum purchase price for their next property is over £250,000.
Changes in the pension rules and the freedom to invest how they wish has opened up alternative ways of placing their money for a return, property appears high on that list, however according to the Prudential only 14% say their plans have come about as a result of the pension rule changes and just one in 10 think the changes make them more likely to buy a property in the future, properties that would interest them the most would be, second homes, buy-to-let / development properties or homes for their relatives.
A high proportion of those over-55s who are planning a property purchase say that it is likely to be their last says the Prudential and 33% of them who are re-entering the property market are doing so to move somewhere more suitable for older people and 21% are doing it to live in a quieter area, the biggest motivation for over-55s planning a property deal is to downsize.
Stan Russell, retirement spokesperson at Prudential, reportedly said: “There was a lot of speculation that the pension freedoms would spark a rush of over-55s investing in buy-to-let property as a means of generating income in retirement. However our research suggests that this hasn’t yet been the case.
“In fact the process of withdrawing cash from a pension fund to purchase property and potentially generate an income is complex and could result in a large tax bill. Anyone aged 50 or over with a defined contribution pension is entitled to free and impartial guidance from the Government’s Pension Wise service, and many of those considering accessing their retirement savings under the new freedoms would benefit from a consultation with a financial adviser.”