The Telegraph reported a survey suggesting that of the 200,000 people intending to cash in their whole pension pot next April when the rules change, 32,000 planned to buy a BTL property.
It went on to spell out the tax consequences – a potential tax bill for the property owner 43% higher than that of someone who keeps their pension plan and just draws income from it.
Many people haven’t yet appreciated that under the new pension freedoms from next April, a key issue is tax planning. With a bit of care you can take thousands in tax-free income from your pension pot – whereas you can pay a lot of tax at up to 45% if you cash it all in. Ask for our advice before you make your pension decisions.