After UK Chancellor George Osborne announced last March that existing retirees would be allowed to cash in their pensions, the reform has now come into effect. In an article featuring the implications of this reform, Bloomberg Business outlines that this great move will allow 5 million people who have already retired to collect their proceeds either as a lump sum or draw them gradually.
Interestingly, the biggest blow to the pensions industry in over a century might have just opened up great opportunities for the Maltese property market. In the face of near-flat yields on Government securities (Gilts) and Cash and other factors including higher yields on Equities and UK property to let (6-13%) as well as the current relative weakness of the Euro, there is a high potential that the sudden spurt in UK retiree cash flow might be directed towards Malta.
Those benefitting from the pension reform and looking to invest might find that buying property in Malta is the way to go, particularly following the European Central Bank’s decision to embark on quantitative easing. In an interview given to the BBC, Warren Buffet (CEO, Berkshire Hathaway) said that this would lead to an inflation in asset values, including property.
This whole context is yet to unravel, however it will be interesting to follow its developments and the way in which the Maltese property market will be approached as well as its responses.
Malta Sotheby’s International Realty expects the pensions reform to boost investment in property in Malta.
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