Thursday, 8 December 2016

Top 5 reasons property beats a pension

I regularly chat with people who have money to invest to discuss how they could put this to work in the property market. Whilst for some this forms part of a larger investment portfolio, for many property has become an alternative to a private pension.

I believe there’s many good reasons that people are making this choice. Here’s a few of them:

5) Accountability to yourself

Frankly I, and many others, would rather keep their money where they can see it. I don’t like giving it away to a faceless fund manager to play with (whilst paying them fees, often regardless of performance).

I can touch my properties, I know the market and can make an informed decision as to what property I buy and how it is managed. It’s far easier to track how my properties are performing rather than relying on a pension scheme to ride the right waves to keep up with or outperform the market.

4) Short term income

Property can pay me straight away. Yields in Chichester may only average four to five percent but that’s far better than I can get from a savings account and eventually from an annuity, whilst rent normally increases over time in line with inflation. Hargreaves Lansdown suggest a 55 year old would now receive just 1.9%+inflation or 3.9% fixed for life from their pension fund.

3) Long term investment returns

Property has outperformed all the other main asset classes (which pension funds will track) over the long-term. Monies invested in 1996 would have grown two decades later by 292% in government bonds, 308% in the stock market, 479% in property and 1,305% in property leveraged with mortgage borrowing.

2) Flexibility

Owning property gives flexibility as to whether you use some of the income or equity at any time you need it, rather than it being locked away in a pension scheme with set rules as to when you can access your money.

1) Benefits on death

This is the big one for me and has really hit home as I wade through my late father’s financial affairs.  One of his pension schemes has no death benefits, two others will half the monthly payment as a ‘widow’s pension’ and another sees the lump sum payout that was due in nine months (his 65th Birthday) go up in smoke. He had only begun to benefit from one of those four schemes due to his age. And these were pretty attractive ‘guaranteed’ private pension schemes - I hate to think of the stuff people are signing up to now!

Property meanwhile will continue to yield rental payments even on the owner’s death. And perhaps more importantly, it can be passed down to the next generation, rather than vanishing into the pension provider’s coffers instead.

If you think there might be a better future for your money in property and you would like to discuss your options whilst using my knowledge and experience of investing in the local property market, please get in touch.

(This article was featured in the Chichester Observer's property section on 1st December 2016)

Clive Janes, CRJ Lettings.


If you are looking for an agent that is well-establishedprofessional and communicative in Chichester, then contact us to find out how we can get the best out of your investment property.

E-mail me on or call 01243 624 599.

Don't forget to visit the links below to view my previous buy-to-let deals and Chichester Property News articles:

c/o CRJ Lettings, 30B Southgate, Chichester, West Sussex, PO19 1DP

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