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State pensions to rise 2.5%, property investment could still be the answer
State pensions to rise 2.5%, property investment could still be the answer
With the news that the rise in the state pension has been set at 2.5%, which will take effect in April 2013, property investment as a pension could still be the most profitable solution for those looking for a comfortable retirement
Maidenhead,
Berkshire,
United Kingdom
(prbd.net)
07/12/2012
With the news that the rise in the state pension has been set at 2.5%, which will take effect in April 2013, property investment as a pension could still be the most profitable solution for those looking for a comfortable retirement. This is the minimum level introduced by the Government two years ago.
In 2010 a 'triple lock' commitment was made. This occurred when the state pension rises were controversially switched from the retail prices index (RPI) to CPI, which has always risen at a slower pace. This promise does not cover the State Earnings Related Pension Scheme or State Second Pension.
The Government has said that this rise will be made to those who have made the correct national insurance contributions, and will rise in line with CPI inflation.
Gill Alton runs Alton Property Partners, offering a residential investment property service to help you build a portfolio for a secure financial future. Alton Property Partners provides a comprehensive and personal Property Portfolio Building Service for buy to let investment in the UK. Gill believes that property could be the answer to your pension. She says:
"The Government moved the goal posts for how the State Pension was calculated in 2011 moving the index to which it is linked from the Retail Price Index (RPI) to the Consumer Price Index (CPI). The CPI is known to be lower than the RPI figure as it includes different elements within the basket of goods they monitor and a different calculation is used to ascertain the final inflationary figure.
"Moving to CPI was a clever move by the Government as it considerably lowers the increase they need to apply to the State Pension, even taking into consideration the 'Triple Lock' commitment.
"So what does this mean? The reality is by putting a stake in the ground based on the September inflationary figures existing pensioners will be once again penalised as 2.5% growth or an extra £2.68 in their pockets will do nothing to cover the rising fuel and food prices they will need to sustain. Also by the time this new increase in pension is introduced in 2013 it will already be 6 months behind the reality of the economy. So once again pensioners will feel the squeeze, after all £110.13 a week only equates to an annual income of £5,727, which is below the UK Poverty Line.
"It is unlikely this situation is going to improve in the future as the country creaks under an ever expanding 'aging population', so unless you wish to be one of those pensioners who have to face such financial hardship it is more essential than ever that you make your own pension provision. A provision which can withstand and actually benefit from the devastating affects of inflation. Such a provision could be in the form of property as a pension."
Notes to Editors
Gill Alton is the founder of Alton Property Partners, which provides a comprehensive and personal Property Portfolio Building Service for buy to let investment in the UK. To find out how property could be the answer to your pension worries, click here. Alton Property Partners manage the entire investment process, from sourcing property at a discounted value, co-ordinating the Mortgage, arranging the refurbishment, right through to ensuring it is ready for the rental market
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About
Gill Alton is the founder of Alton Property Partners, which provides a comprehensive and personal Property Portfolio Building Service for buy to let investment in the UK.
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