Wealth of Advice, Swale House, Mandale Business Park, Durham, DH1 1TH
In this episode of the Retire Well podcast, advisers Matthew and Joe explore one of the most debated topics in personal finance: should you invest in property or pensions to fund your retirement? Drawing on client experiences and financial planning principles, they weigh the pros and cons of both approaches.
Property is often seen as a tangible, stable investment. Joe explains the appeal:
“Clients really like that sort of bricks and mortar—it’s tangible. You can touch it.”
Rental yields in the UK have averaged between 5–8%, with the North East offering some of the highest returns. Property also offers the potential for capital growth, with UK house prices rising over 40% in the past decade.
However, the advisers caution that property isn’t as passive as it seems. From stamp duty and maintenance costs to tenant issues and tax returns, being a landlord can be time-consuming and unpredictable.
Pensions, on the other hand, are purpose-built for retirement. Matthew highlights their flexibility and tax efficiency:
“You’ve got the ability to change a plan, to diversify… and if something changes in your plan, you can often access funds within two weeks.”
Pensions offer tax relief on contributions, tax-free cash on withdrawal, and a wide range of investment options—including equities, bonds, and even property funds. They’re also more liquid and easier to manage than physical property.
Some clients successfully combine both strategies—using property for early retirement income and pensions as the long-term foundation. Others inherit property and must decide whether to keep or sell. The key is understanding your goals, risk tolerance, and how each asset fits into your broader financial plan.
There’s no one-size-fits-all answer. Both property and pensions can play valuable roles in retirement planning. Here’s a quick comparison:
Ultimately, the best approach depends on your personal circumstances, financial goals, and how hands-on you want to be in retirement.
If you want a better view of what your future could be, we'll have a chat and work out if we make a good fit for you and your financial picture.
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