The value of investments and any income from them can fall and you may get back less than you invested.

Can you fund your retirement by selling your house?

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When, last year, Brewin Dolphin commissioned research into the nation’s attitudes to wealth, more than one in four (27%) people said they planned to use property to fund their retirement.[1]

It is no secret that as a country we are obsessed with bricks and mortar. Many Britons see buy-to-let property as an attractive source of retirement income. Some people even talk about selling their family home to provide them with funds for retirement.

Is that sensible? We would argue that property can play an important part in an investment portfolio and a central role in retirement planning. But it would be a mistake to fixate on bricks and mortar to the detriment of everything else.

It is important to remember that part of the reason property investment appears so profitable is that it is often leveraged, meaning people borrow to invest. Borrowing to invest can boost returns when interest rates are low and things are going well financially, but it also increases risk.

People are attracted by the gains they have made on property in the past, though recently the housing market has slowed, quite markedly in some regions. The profitability of buy-to-let properties has also been impacted by a number of tax changes.

Property can also be an illiquid asset, meaning it can be difficult to sell in an emergency. Then, where rental property is concerned, there is the hassle of maintenance to consider – not to mention running costs like insurance and agents’ fees.

The case in favour of property investment is not as cut and dried as some make out. Property can supplement other investments as part of a balanced portfolio, but we wouldn’t suggest you rely on bricks and mortar for your retirement income.

 

 

 [1] Brewin Dolphin research for Family Wealth Report. Opinium surveyed 5,000 adults between 30 August and 5 September 2018: 17% said they would downsize to fund their retirement, 6% said they would use buy-to-let property income and 4% would engage in equity release.

1Brewin Dolphin research for Family Wealth Report. Opinium surveyed 5,000 adults between 30 August and 5 September 2018: 17% said they would downsize to fund their retirement, 6% said they would use buy-to-let property income and 4% would engage in equity release.


The value of investments and any income from them can fall and you may get back less than you invested.

No investment is suitable in all cases and if you have any doubts as to an investment's suitability then you should contact us.

Past performance is not a guide to future performance.

Please note that this document was prepared as a general guide only and does not constitute tax or legal advice. While we believe it to be correct at the time of writing, Brewin Dolphin is not a tax adviser and tax law is subject to frequent change.  Tax treatment depends on your individual circumstances; therefore you should not rely on this information without seeking professional advice from a qualified tax adviser.

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