It seems recent years have seen a shift in the way the over 55s are funding their retirement. The banks are slowly being ‘shunned’ in favour of alternative investment methods, with Peer-to-Peer Lending increasing a huge 84% in 2014 amongst those financing for when they retire. We’re expecting recent pension freedoms to also boost the P2P Lending sector, with many retirees opting to withdraw their pension pot in one go.
A change in attitudes towards investment
Though these alternative methods provide competitive rates in comparison with those offered by the high street banks, there is an element of risk involved. With Peer-to-Peer lending your capital is at risk and interest payments are not guaranteed if a borrower defaults. However, the recent trends are indicating that we’re also seeing a shift in attitudes towards investment. The over 55s are becoming riskier in their investment choices in order to provide a potentially superior income for when they approach their retirement.
Exploring the options
With over 55s seeing, at best, just over 3% return on their investment with the banks (if cash isn’t touched for 7 years), it’s no surprise that this demographic is exploring other options. Property is also becoming a popular investment choice; a survey from the Office of National Statistics found that 42% of people would consider investing in property to make the most out of their money for retirement. This option came ahead of employer pension schemes, savings accounts and stocks and shares.
With Wellesley & Co, investors can earn up to 6.32% per annum through our rapidly growing Peer-to-Peer Lending Platform, offering an attractive alternative for those financing for retirement. Capital is at risk if a borrower defaults. Should a borrower default, the Wellesley model incorporates secured lending and security arrangements however, there is no guarantee that investor’s full capital will be returned.
Asset Backed Lending Platform
For over 55s favouring property as an investment choice, Wellesley’s ‘asset-backed’ lending platform specialises in funding loans to typically but not exclusively property developers. This means that you can consider this option without the additional costs and inconvenience of actually owning property.
Diversifying your money over a range of investment platforms is highly recommended when funding for retirement, and will reduce the impact should a borrower default. If you would like advice regarding your most suited investments, we encourage people to seek a financial and independent Professional advice. If you would like further information on what Wellesley & Co have to offer, please contact our Customer Service Team; [email protected] or 08008886001