Savers warned over property plans
Retirement savers in their mid-40s and early 50s have been urged to think twice about raiding their pension to invest in buy-to-let property.
YouGov polled 2,014 over-45s on behalf of Royal London and found 15% of over-55s are considering investing in property to fund their retirement.
That percentage almost doubled to 29% for individuals approaching the age at which they can access their retirement savings under pension freedoms.
Since April 2015, savers have had more choice when it comes to accessing their pension.
The first 25% of a pension pot can usually be taken as a tax-free lump sum from the age of 55, although anything above this percentage will attract income tax.
Royal London also claimed that investing in property could make these individuals liable for property taxes, such as stamp duty in England and Northern Ireland.
Fiona Hanrahan, business development manager at Royal London, said:
"Many retirees consider taking their pension as a lump sum to purchase a buy-to-let property.
"However, they risk being clobbered with tax to the extent they are unlikely to be able to afford the property they were hoping to buy.
"There is little understanding of how pension lump sums are taxed and people could find out too late and lose many thousands of pounds."
Speak to an expert before raiding your pension.