Six months on since the government offered British investors the freedom to manage their pension pots, pensioners are no longer required take out an annuity to provide the income they need on a regular basis during their retirement.
As a result, more than 200,000 people have accessed £2.5 billion worth of funds, according to the Financial Conduct Authority. Since the new rules were introduced, some cynics predicted the funds withdrawn would potentially be frittered away on sports cars and luxury yachts. However, the investments made have been widely regarded as sound and reasonable, as people genuinely look to make the most out of their hard-earned savings. It is too early to tell whether there is a permanent change in investor behaviour but it is clear that, for now, annuity arrangements are taking a back seat.
Mix and match
The Government have increased the flexibility of the income drawdown rules by removing the maximum ‘cap’ on withdrawal and minimum income requirements for all new drawdown funds. . Shopping around for the right combination of investments is essential. Whilst pensioners have previously been constrained by the requirement to purchase an annuity to generate their retirement income, this new-found flexibility should be considered carefully.
Risk, regularity and return
From stocks and shares to government bonds and cash, an investment strategy will often be determined by the investor’s age and their appetite for risk vs. reward. For all investors, it is important to understand the risks and returns associated with any investment. For pensioners, it is also essential to understand the regularity of income they will receive and to ensure that their funds are exposed to as little risk as possible – ensuring that their retirement income is sustainable.
Property
Residential property has consistently been the best-performing major asset class in the UK as it delivers the most reliable returns. At Wellesley & Co, our Peer-to-Peer lending platform works alongside the property sector by providing finance to experienced property developers. As property prices continue to rise, investing funds in bricks and mortar is a tangible, physical option for investors, whether you’re a pensioner or not.
Working for pensioners
For those who have spent the majority of their years working hard to build a reasonable pension pot, the roles are now somewhat reversed – pension pots should be working hard for pensioners. At Wellesley & Co, we want to deliver straightforward investment options that will see you generate a healthy return on your money. We also ensure that each investor has the maximum level of diversification through our Auto-matching Tool. Further to this, we treat investors’ money exactly the same as our own, as we invest our own money in every loan made through our platform. As a result, we are the first to lose money if a loan was to fall into default.
We also understand the flexibility that pensioners need to ensure a regular income. We offer a range of terms from 30 days to five years that can see you earning a monthly income of up to 5.50% per annum. We have tailored our product offerings to ensure that pensioners are getting what they want, to suit their pension requirements.
Rest assured
Managing an investment portfolio is no easy task, for any investor of any age – hich is why it’s important to do your homework and pick an investment solution that suits your investment needs. For pensioners who want to be sure of an income and ensure their investment is as secure as possible, our way – The Wellesley Way – is a clear solution.