Your Retirement Investment Options - Pensions VS Property

Last updated 10th July 2020 • Lois ArcariJaeVee

Investment, Pensions, Property + 1 more

You’ll always want to get your retirement investment right so as to reward yourself properly for decades of hard work.

But what’s the best way to use your money?

We’ll guide you through pensions and property to help you decide what the best retirement investment could be for you.


Let’s start off with pensions.

We have to admit that there are plenty of reasons they’re the ‘go to’ of property investment options.

They’re more accessible than ever now.

Everyone’s paid in with the new 3% auto enrolment, you can draw them out from the age of 55 over, and it’s up to you how you use it.

You could ‘draw it down’ when you need it, buy an annuity, put it in the stock market or draw it out in one lump sum - so most property entrepreneurs invest in property as just one of their retirement investment strategies.

What more do pensions offer that property doesn’t?

  • You get tax relief on any contributions you pay into your pension pot, with the government paying in the difference.
  • Unlike company shares, pensions are protected - you can be compensated for up to 100% of your contributions if your pension provider can't pay you and is FCA protected. However, if you have a final salary pension and your employer goes bust before you retire, you could lose up to 10% of your pension pot.
  • Pensions don't count for inheritance tax purposes.

BUT pensions just aren’t 'safe as houses anymore.'

    • With recent plans to push state pensions up to 75, many people are worried they might never see the money in their pension pot - while there’s no age limit for investing in property - and young investors are becoming ever more common.
    • While pensions have traditionally been regarded as a low risk investment, the data’s starting to say otherwise. According to Moneyfacts, pension funds actually went down in value by a startling 6.2% in 2018. While property can also be a risky business, people will always need a roof over their head - and with the housing crisis only cutting deeper, there’s more demand than ever.
    • If you stick with the traditional and just have a workplace pension, your retirement investment portfolio is in your employer’s hands... and the government’s too. Property investment is the retirement investment option where you’re empowered to take hold of the reins.

Heart vs head

It’s a stereotype that making a retirement investment in property will only lead to heartbreak when you leave the family home.

For one thing, there’s plenty of money to be made in property without selling your whole home - or even your own home at all!

With the increase in spare time that retirement provides, and the insight you’ll already have from living in your local area, you’ll be well equipped to start your property journey without putting a single brick for sale.

Whether you finally have the time to invest in that property course you’ve always wanted to take, or you’ve found the perfect student buy to let, the property industry couldn’t be more open to investors of all ages - and all kinds of new ideas.

If you want to downsize without having to move out, renting to lodgers has long been recommended as a great way to bring in money while beating the loneliness epidemic that faces both young and old in the UK today.

If you do want to downsize specifically to a retirement property, retirement property is now an innovative, wellbeing focused market centred around creating communities and providing great quality of life, with the reassurance of quality care should you need it.

Not to mention the gigantic growth of luxury in the retirement industry.

Placing your retirement investment into property could be a canny move for your purse, the people in your community and you.

Money, time & effort

These are the 3 big reasons that the general public sees pensions as the most secure form of retirement investment.

Pensions require very little thought or effort/tax relief and government boosts of up to 45% on all money added mean that they are indeed very secure.

However, there are perks to property as a retirement investment that make up for the heavy set-up costs.

  • You don’t have to go it alone - while some are put off property because of the daily management - of tenants, renovation and repairs, or the selling itself - you can utilise plenty of people, such as lettings agents, for a smooth journey through property investment.
  • Passion for property - it’s a chance to get stuck in, pull up your sleeves, use the smarts you’ve built up all these years and sell the one place you know best - and many more, if you get bitten by the property investment bug!


At the end of the day, a pension’s always likely to be a safe bet.

But property investment is a way to go the extra mile to generate new income.

With the methods of property investment as diverse as the properties themselves, we’d encourage anyone to think about placing property as part of their retirement investment portfolio.

To learn more about retirement property, keep up to date with our blog.

Capital is at risk.  The value of investments can go down as well as up and you may lose some or all of your investment.  Investing in shares is illiquid and you must be prepared to hold your investment for the full term.  Past performance is not a guarantee of future performance.  The Financial Services Compensation Scheme does not cover poor investment performance.  Investments are available to high net worth and sophisticated investors only.  You should read the full risk warnings on the website before making an investment.  Nothing in this blog should be considered as investment advice and we recommend that you seek independent financial advice and conduct your own due diligence before making any investments.