Property: The best alternative to traditional pension provision?
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‘OUR EVER SHRINKING PENSION PAYOUTS’, screamed the headline in the Daily Mail on 31st August, with the sub-heading, ‘Millions are making the lowest returns on investments since records began’ and the news that over the past 15 years, annuity rates have fallen by 45% (research from Moneyfacts).
In contrast, if you look at the average house price figure from the Land Registry, for England and Wales, it has climbed from £61,048 in July 1995 to £166,798 in July 2010.
Says the Daily Mail, “The average pension pot is about £30,000. For a man aged 65, this would have resulted in an annuity worth around £3,300 a year in 1995, compared with just £1,800 today.”
In contrast, there are types of property you can buy today that generate over £1,200 a month gross profit. If you’d bought such a property in 1995, by now you should have easily been able to pull all your capital originally invested back out, should you choose, giving an infinite return on investment. On the other hand, if you had chosen to pay off the mortgage, rather than paying into a pension fund, the cash flow would be increased.
Platinum Property Partners, the world’s first property investment franchise – and one of the UK’s fastest-growing franchises - currently has more than 70 franchise partners (franchisees), all investing in property portfolios that provide industry-leading cash flow and returns.
“As PPP’s first Franchise Partner, I am making over £100,000 gross profit per annum and own a portfolio of well over £3 million. I am already enjoying the benefits and will reap additional rewards in the long term through the capital growth of the portfolio. Only being 31, I don’t often think about pensions but my future in that regard is already sorted!” Neil Mansell, Chelmsford
“My first buy to let is currently showing an income of £3,400 a month, with early gross profit indications in the region of £16,000 p.a. It proves to my mind that the PPP model works, and the long term return will be substantial.” Henri Botha, West Drayton
Richard Bowler, a Partner-level management consultant, last year recognised the inadequacy of his current pension pot, into which he has consistently paid 15% of his salary. “If I continue to work and save, and to rely on my private pension for retirement income then I will either have to move to a radically different lifestyle based upon a fraction of the income I am used to at around age 60, or keep working until 70. Or maybe there’s an alternative…” That alternative, for Richard, was property and he joined the PPP franchise in December 2009.
The Platinum Partners Group also offers a portfolio building opportunity for passive investors who do not have the time or inclination to invest on a hands-on basis. This focuses primarily on pension provision, rather than cash flow, and guarantees in-built equity on completion of the portfolio (typically 1-3 years) of £80,000, with great potential for future capital growth.
