A Personal Finance Society boss has badged the prospect of aggressive buy-to-let advertising on the high street ‘frightening’ as estate agents scent opportunity following the introduction of pension freedoms.
David Thomas, president of the Personal Finance Society, said: “I’ve seen two adverts on my high street promoting buy to let since the pension freedoms and with most people having less than £100k in their pension pots it’s problematic. Frightening.”
Speaking at The Great Retirement Money Debate 2015 on Tuesday at 1 Wimpole Street, the panel was dubious about the prospect for guaranteed income which buy to let offers.
In response to a question from Mortgage Solutions group editor Victoria Hartley about the suitability of buy to let as a viable replacement for an income from annuities, Nigel Waterson, chairman of the Equity Release Council, quoted a figure suggesting 70% of people wanted a guaranteed income for life post-retirement.
“Annuities are not dead and for many they remain the best option,” he said.
Jane Vass, head of public policy at Age UK, said most people have too modest an amount of money in their pension pots to make buy to let work for them.
Paul Johnson, director of the Institute for Fiscal Studies, said if you own a home, a lot of your assets already lie in property.
“Buy to let is not a ‘fire and forget’ product like an annuity, it’s also very much a hands-on investment product,” he said.
A speaker in the audience from Kensington Mortgages, said the DAs and ARs they see are worried that advising on buy-to-let mortgages for pensioners could be the next big misselling scandal. She added that advisers are doing everything they can to partner up with pensions advisers to make sure consumers are properly protected.
