A change in UK pension rules heralded in the chancellor’s Budget speech means a retiree can now draw their entire pension in one go, if they wish. For some, the freedom will mean retirement planning that can better suit their needs.
Some will definitely choose the “old way”, a pension, which will last for the rest of the holder’s life.
Yet, most people are asking themselves some questions, due to the rules and regulations of the annuities: a pension company will work out how long the pensioner is likely to live and will offer an income. If the buyer lives longer than expected, the provider makes less money than anticipated, or a loss. If the buyer dies sooner, the pension firm often keeps the difference. This means that, after years of taxes and savings, part of your money may contribute to make pension companies even richer.
People who want to make the most out of their savings will probably withdraw their money, but what then? Will they deposit their sum in a bank with practically no interests? Some of them will.
Others, on the other hand, will realize the dream of their life: retiring in a dream place, like a home by the sea or a country house in the middle of nowhere, surrounded by nature.
Although it may seem expensive, a home investment will turn into a profit, because, despite the current trend, the real estate market will rise again soon, with profits when investors will resell. At the same time, if they make a shrewd investment, they can rent out part of their property, thus covering the annual costs and getting an income for themselves.
So, is April 2015 the right time for UK pensioners to invest in Italy? Let us know what you think.
Here is an article from the BBC News website to learn more about the reform of pensions in UK. Follow this link.