Investing in buy-to-let mortgages could be riskier than a personal pension plan for individuals looking to secure their financial future, one expert has claimed.
Placing a large amount of faith in one type of investment could unbalance a managed pension portfolio, particularly if the housing market were to suffer a crash, warned Douglas McWilliams, chief executive of the centre of economics and business research.
"The normal principles of investment, particularly pensions and long-term investments, is portfolio balance, because you just don't know what is going to happen, there is so much uncertainty around," he remarked.
These comments were echoed by Ed Stansfield, an economist at Capital Economics, who has warned that relying on the property market for a pension provision is "a very risky strategy".
Britons could be raising the likelihood of a financial disaster after reaching retirement - should the property market suffer a serious setback in the interim, he warned.
However, Mr Stansfield noted that some individuals are becoming increasingly "disillusioned" with the pensions market and are turning to buy-to-let mortgages.
Buy-to-let riskier than pensions, expert claims
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Buy-to-let riskier than pensions, expert claims
Mon, 18 Dec 2006
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