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Over-55s in rush to buy property

  • 03/09/2015
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Over-55s in rush to buy property
Two in five homeowners aged over 55 say they plan at least one more property purchase in the coming years, according to data compiled by Prudential.

The provider asked older homeowners about their plans following the introduction of new pensions rules. One in seven respondents said they were planning to buy as a direct result of these changes.

In total, 37% of people over-55 said they planned at least one more property purchase in their lives.

Prudential said this would represent more than three million property transactions worth more than £775bn.

More than one fifth of people said they would be buying a property that they do not plan to live in, with a tenth of homeowners saying the new pensions rules have contributed to this decision.

Most buyers would spend more than £250,000 on a property, with 20% saying they are willing to spend £350,000 or more.

Stan Russell, retirement expert at Prudential, said older people needed to consider their financial options.

“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,” he said.

“Using money raised from a property sale could prove to be a helpful boost to retirement income for some. But it’s no substitute for starting to save as early as possible to prepare for eventual retirement.”

Russell added: “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.”

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