The property market is likely to benefit from the changes to pensions announced in the Budget, according to research from Equiniti Pension Solutions, although buy-to-let is unlikely to see significant growth as a result.
The survey of 40 key annuity providers and pension experts showed that over 50 per cent believe the housing market may be impacted as more people choose to ‘drawdown’ their cash rather than lock it up in an annuity.
Only 8 per cent did not think so and the rest were undecided.
However, only 18 per cent expected a buy-to-let boom, with 36 per cent expecting no change and 46 per cent undecided.
Post-Budget, 97 per cent said there will be an increase in the number of pensioners cashing in their small pension pots, with 87 per cent also believing more pension savings will be withdrawn as lump sums and used for purposes other than retirement income.
Based on this assumption and knowledge of what currently happens in the drawdown market, Equiniti suggested that property will be a direct or indirect beneficiary.
Brian Please, business development director at Equiniti Pension Solutions, said: “Whilst the immediate focus for the customer approaching retirement, providers and advisers is to anticipate the direct impact on the retirement market, there will inevitably be significant knock-on effects to the property and other markets as a result.”
However, many respondents also raised concerns that an increased use of drawdown could see pensioners exhausting their retirement funds, with 46 per cent suggesting that over 20 per cent of pensioners may use up all their funds and just 3 per cent thinking no one would exhaust their savings.
Only 35 per cent of respondents stated that people would spend their money recklessly.
