Your Pension WILL Leave You Short: The Harsh Truth
Do you really trust your pension to take care of your retirement? With all the uncertainty surrounding government decisions, market changes, and the hidden details of pension schemes, depending only on pensions could be a risky bet. Many individuals, when it’s too late, realise that their pensions simply aren’t enough to secure a comfortable retirement. But there is a more stable, lucrative alternative…
Hello, I am Paul Smith. I’ve been property investing for over 40 years and have been fortunate enough to amass a multi-million pound portfolio. Whilst I wouldn’t consider myself being particularly bright, I have one thing that works in my favour… I have the right information. It has taken decades of experience to gain this information and I feel obliged to share it with others.
In this blog, we’ll dive deep into some essential pension-related questions, answering the big question of if pensions are good, or if they are just an elaborate sham for the government to take more from your pocket. All while showing you why you should reconsider relying on your pension alone and explore a future built on commercial property investment.
Is That All You’re Getting?
Most people assume their pension will be enough... Until reality hits
The truth is, pension savings can leave you short. For many, their state pension offers just £5,000 to £6,000 a year. Does that sound like enough to live on? Probably not.
Whilst pensions are means-tested. Pension credit is designed to top up low incomes, but is that really what you’ve worked for? After decades of hard work, relying on means-tested benefits just isn’t enough for the retirement lifestyle most dream about.
The Downside of Relying on Means-Tested Benefits
Means-tested benefits like pension credit can leave you at the mercy of shifting government policies and unforeseen changes in your financial circumstances. These benefits are there as a safety net, but they won’t offer the kind of lifestyle or security that financial independence demands.
Tax on Pension Lump Sums? It’s Not as Simple as You Think
While pensions work by offering some immediate relief in the form of a tax-free lump sum (you can take 25% of your pension pot tax-free), the rest is taxable. When you finally need your pension to cover your living costs, the taxman takes his share again. Sure, pension contributions might be pre-tax, reducing your tax burden now, but the real question is: how much of your pension will you actually get to keep in the long term?
Pension contributions are generally pre-tax, and they’re tax-deductible. But don’t be fooled! Just because you get tax relief now, doesn’t mean you won’t be paying taxes when you access your pension. Once you start drawing down your pension, you’re back to paying taxes.
The Hidden Costs of Your Pension
While contributions might reduce your tax bill in the tax year they’re made, every pension payment is subject to income tax when you retire. Here’s what you might not realise:
- You’ll pay tax on 75% of your lump sum.
- Every pension payment is subject to income tax.
- Contribution benefits don’t guarantee long-term financial security.
"I’ll Just Rely on My Pension" Is a Dangerous Game
What does £720 a month sound like for your retirement? That’s the reality for many relying on the state pension and basic workplace pensions. Even if you qualify for pension credit, you can only backdate it for up to 3 months, which is hardly reassuring when you’re already in a tight spot.
Pension credit can be backdated, but only for a limited period. Worse still, pension credit can be stopped at any time due to changes in your income, savings, or living arrangements.
Unfortunately, pension funds can also go bust. While the Pension Protection Fund might provide some safety net, you’re not guaranteed to get the full amount. Defined benefit and final salary pensions can leave you with far less than you expect if your employer’s fund goes under. The question is: do you want to take that risk with your future?
Want to Take Control of Your Future? Here’s How
Instead of gambling with your future on unpredictable pensions, why not explore something more reliable like commercial property? Workplace pensions and personal pensions are volatile, but commercial property investment offers stability and long-term returns.
With pensions like SIPPs (Self-Invested Personal Pensions) and SSAS (Small Self-Administered Schemes), you can invest in real estate, including commercial property, using your pension pot. It’s a way to grow your pension on your terms, rather than leaving it in the hands of the stock market or government legislation.
Benefits of Commercial Property Investment
Investing in commercial property offers:
- Stable, long-term returns that outperform traditional pension growth.
- Control over your financial future with strategic investments.
- Tax benefits when using a SIPP or SSAS to fund your investments.
Here’s why commercial property outshines pensions:
- Consistent, reliable cash flow.
- Asset appreciation over time.
- Tax-efficient investment structures within pensions like SIPPs or SSAS.
Real People, Real Solutions—Commercial Property Success Stories
It’s one thing to talk about how commercial property can outperform traditional pensions, but let’s hear from real people who’ve made the shift and reaped the benefits.
Case Studies: From Pensions to Property Investments
Leslie's Story:
Leslie had always counted on her pension to fund her retirement. However, when she realised her pension savings would only leave her with around £720 a month, she knew she needed to take control of her financial future.
After attending a Touchstone Education course, Leslie shifted gears and began investing in commercial property through her pension. Today, she is well on her way to generating substantial returns, and she no longer relies on her state or workplace pensions to determine her future. Through property investments, she is now building a secure and comfortable retirement on her own terms.
Asmael’s Journey:
Asmael had a solid work ethic, but she feared her pension wouldn’t be enough to provide for her family. Driven by a desire to leave a legacy, she decided to explore new avenues for financial growth.
After discovering the potential of commercial property investment through her pension pot, Asmael took the leap. Now, she’s generating significant income from her property investments, ensuring her family’s future is secure. Thanks to her commercial property portfolio, she’s no longer limited by the uncertainties of her pension and is confidently looking towards a prosperous retirement.
Both Leslie and Asmael found that relying on pensions alone wasn’t enough. By making informed decisions and investing in commercial property, they’ve taken control of their financial futures and secured long-term, sustainable wealth.
Conclusion: It’s Time to Rethink Your Pension Strategy
The harsh reality is that relying on pensions alone for your retirement could leave you short. Pension savings may not grow as expected, and when you finally retire, you might face more taxes than you planned for.
It’s time to consider alternatives like commercial property investment, which offers stability, higher returns, and long-term security. You’re just a few decisions away from securing a better future. Let commercial property be the key to your comfortable retirement. Learn how you can use your pension pot to invest today and take control of your financial destiny.
