Welcome news on pensions but housing for older people missing from budget.
The Budget brought some welcome news concerning people’s pensions with the announcement that up to five million pensioners will be given the freedom to sell their annuity for a cash lump sum.
From April 2016, people who already have an annuity will be able to now effectively sell it on, so that they too can benefit from the pension freedoms announced at last year’s Budget.
Currently, people who have bought an annuity are unable to sell it without having to pay at least 55% tax on it. From April 2016, the tax rules will change so that people who already have income from an annuity can sell that when they choose and will pay their usual rate of tax they pay on income, instead of 55%.
However, the Budget did little to address the housing needs of the country, in particular the needs of an ageing population.
Whilst first time buyers will be given a boost whilst saving for a deposit with a £50 bonus from the Government for every £200 saved in an ISA, there we no incentives for those at opposite end of the property ladder.
The Budget came just one day after the largest rally yet for people protesting about Britain’s housing crisis. The “Homes for Britain” rally saw thousands of people gather at Westminster yesterday to protest at governments’ failure to address the shortage of affordable housing in the UK.
Whilst the government has in recent years introduced the Help to Buy Scheme to help first time buyers, the lack of affordable housing for both young and old is a major issue that must still be addressed.
The majority of building has been focused on high spec city centre flats aimed at young professionals and there are few developments that can be classed as affordable housing or aimed at the retirement market.
With one in three people expected to be aged 55 and above by 2030, the government needs to be planning where these people are going to live.
The desire to downsize is strong amongst Britain’s pensioners, but many are prevented from doing so because of a lack of suitable retirement properties in desirable locations.
The result is a property bottleneck. Eight million people live in homes too large for them to manage and too expensive for them to heat. At the other end of the ladder, millions of families can’t find appropriate housing for their needs.
Girlings Retirement Rentals www.girlings.co.uk