It's not hard to see where the freed pension money is going
You don't have to be a pensions expert to figure out where all that freed up savings cash is headed: all you need to do it take a quick look at mortgage best buy tables.
Buy-to-let mortgages have never been cheaper or more prolific. The number of cheap landlord mortgages available has risen by more than three-fold in the run up to pension freedoms as lenders try to tempt pensioners into becoming landlords.
According to comparison site Moneyfacts.co.uk, investors have a whopping 226 fixed rate deals to choose from, compared to 162 six months ago and just 71 a year ago.
Learn more about your pension income options
It's good business for lenders because they do not have the strict financial checks to run through as they would with residential loans because buy-to-let is treated as a business loan and they just need to make sure the rent will cover the mortgage. Nationwide has even upped it age limit on buy-to-let lending to 105 so you can see the banks are really gunning for the business.
Now over-55s can get their hands on their pension cash they are presumably going to think, like the banks, that buy-to-let is good business for them.
Plenty of pitfalls
While some people may plough their money into property to help out their children and even grandchildren get a foot on the property ladder, there will be others who believe they will be able to live off the rental income in lieu of a pension income.
But there are plenty of pitfalls if you think it's going to be as easy as getting your pension cash and purchasing a property.
The first is the huge tax bill you will have to pay in order to take a big enough sum out of your pension to put down a deposit on a property. The media keeps talking about the tax implications of accessing your pension cash but I can't stress strongly enough how important it is to calculate your tax liability. For some people, the tax bill will make the dream of purchasing a buy-to-let impossible because a huge amount of the money will go to the Treasury.
Learn more about your pension income options
If you've got past the tax concerns then think about the difficulty of being a landlord. It's not an easy job. Having been one in the past I can assure you that when an email pings into your inbox from a tenant it is not going to be good news, it will be costly news.
And that's in the periods where you have a tenant; it's even more costly when you don't.
The banks may want you to become a landlord but you might enjoy your retirement more if you stay a pensioner.
Read more:
Putting your pension into property: why it may be a bad idea
How to invest in bricks and mortar
Property vs pensions: what's best
