When it comes to retirement, most people have the same ambition: to spend their later years doing what they love without worrying about scraping by.
But what’s the best way to build a nest egg to keep you secure in your old age?
Let’s look at two popular forms of investment: buy-to-lets (BTL) and pensions.
Reasons to invest in a buy-to-let
- Landlords can enjoy a monthly income plus capital growth.
- The property market has been buoyant over the past decade, with prices jumping 73% between 2013 and 2023. (Source: ONS)
- Demand for rental properties is high – a trend that looks set to continue. Average UK yields are 5.6% (Source: Zoopla).
- Investors who enjoy DIY, have a trade or an eye for design can add significant value to a property.
- If you know the local market, you may be able to invest in an up-and-coming area before prices surge.
- You can sell your buy-to-let whenever you want, whatever your age. Although the transaction will take time to complete.
Considerations
- Being a landlord comes with obligations and legal responsibilities. Many investors get a letting agent (the cost of which is tax deductible) to handle the day-to-day management of their BTL.
- Property prices can fluctuate, and there may be times when your buy-to-let is untenanted. However, you can get insurance to cover the loss of rental income.
- As a landlord, you’re responsible for covering repairs and maintenance.
- You may have to pay capital gains tax should you sell up.
Reasons to Invest in a Pension
- You may be able to claim some tax relief on pension payments.
- Depending on the type of pension, your employer may make contributions.
- If your pension is a SIPP (self-invested personal pension), you’ll have flexibility over where you invest.
- You can take small sums from your pension when necessary (age permitting). You don’t have to cash it out all at once.
Considerations
- Commonly you must be 55 to access your pension. (This jumps to 57 in 2028).
- Most pension funds invest in stocks and shares, these can rise and fall.
- Some workplace pensions offer little choice as to the nature of the investments.
- Your pension provider will charge you fees.
The hybrid option
To diversify their investment portfolio, some people invest in a BTL and a pension. While not everyone can afford to do this, if you’re in a position to do so this is an option to consider.
Disclaimer
With all major investment decisions, it’s always best to consult a financial adviser for recommendations tailored to your situation.
Contact us today to learn more about investing in the local property market.
Telephone | 01606 339922 | 01829 700359 | 01925 595950
Email | [email protected]
Website | www.storeysofcheshire.co.uk
Explore more here:
About the Author: Aidan Flanagan | Operations Manager
Read More Articles
The Art of Downsizing
One size does not fit all. Once upon a time, downsizing was a dish saved for dessert: ‘le plat final’ after the starter serving of newlywed domesticity and the main course of 2.4 children and 
The Return of the Committed Buyer
Why Spring 2026 Favours the Prepared Seller… There is no denying the turbulence of the past 24 months, politically, economically and legislatively. For much of the past two years, momentum in the housing market has been
The Two-Minute Test: How Buyers Read a Home
There is an unspoken moment at the start of every viewing. It happens before the kitchen, before the brochure, before the viewing agent has finished their first sentence – often before the buyer has even
The Art of Downsizing
One size does not fit all. Once upon a time, downsizing was a dish saved for dessert: ‘le plat final’ after the starter serving of newlywed domesticity and the main course of 2.4 children and
The Return of the Committed Buyer
Why Spring 2026 Favours the Prepared Seller… There is no denying the turbulence of the past 24 months, politically, economically and legislatively. For much of the past two years, momentum in the housing market has been
