Pension Myths 2 of 5 – My House Is My Pension

Home as your pension for retirement
A Home in the Snow

The ever-increasing cost of property has meant that the only investment that many people make is purchasing their own home.  Money Observer reported that over 50% of over 50s have stated that their house is their pension.  Indeed, the value of a property generally increases over a long period of time and so is a good investment, but should it be the sole or primary source of income for a pension?

There are a number of potential issues that need consideration when using a house as a sole or primary pension fund:

  1. To release the capital, you will need to sell your home.  Downsizing and purchasing a lower value property will release some capital, but not all;
  2. If you sell your home, then where will you live?  Renting is an option, but can often be expensive and difficult for people who have owned their own home for most of their life;
  3. Will you be able to easily sell your home and get the price that you are looking for?  There are still uncertainties in the economy and selling a house for the best price may take a considerable amount of time;
  4. Do you want to sell your home?  Moving from a home that has been nurtured and lived in for many years can be very traumatic.  Often it means moving away from friends and the local community at a time when such things are gaining a greater importance;

By investing in a pension it would be less likely that you would need to sell your house and that you would be able to enjoy your retirement in the comfort of your own home.  In a pension, money is spread across a range of investments, which is a far safer strategy than just relying on one investment (ie your home) and guarantees you financial security when you retire.

To find out more about personal pensions and how to start planning for the future, please contact us on 01443 229589 or by email on