Investors Looking Towards Niche Investments

1 July 2015

More Investors Looking Towards 'Outside Of The Box' Niche Investments For Their Pension Pots With the advent of the government's pension freedoms, which means those people taking their pension are no longer obliged to use their pension pot to buy an annuity. This has opened up to people many other ways of investing their retirement savings from investing in property to ISAs and even a simple savings account, the choice is theirs. But what this has also triggered is also a wider selection of more unusual investments.

This week saw one of the most unusual. Costing more than £25,000 but offering what the seller terms 'guaranteed fixed net returns of 8% over the first two years', people can now invest in a car parking space at Gatwick Airport. Property Company PCH has over 500 parking spaces available for investment that are available to anyone who already owns a car parking space at Gatwick airport. Because these spaces cost around £20,000, buying the PCG investment car parking space would mean the complete investment required would be £45,000. Quite how 'guaranteed' these returns are are unclear.

It's not just carparks that people can invest their pension pot in however. Other unusual investments include:

Investing in woodland

Some investors are attracted to the idea of investing their pension pots into woodland. In the short-term, it can provide a nice area for people and their grandchildren to explore and play, but if managed effectively, woodland can provide a commercial return. As well as being one of the most environmentally conscious investments, investing in woodland brings with it 100% business property tax relief after two years and if the land is still held at death, there is no inheritance tax payable nor is their capital gains tax on the asset. Other environmentally conscious investors who don't want the actual responsibility of owning a woodland can invest in a specialist woodland fund.

Crowdfunding

Crowdfunding is the biggest growth area of business funding and could provide an attractive investment opportunity for less risk averse investors looking to maximise their pension pot. Crowdfunding is where companies who may not be able to access traditional sources of finance such as bank loans raise finance by getting a large number of people to each invest a small amount of money for a small stake in the company. There are lots of different companies and platforms that provide the opportunity for investors to buy into these startups such as Seedrs and CrowdCube, but anyone who invests in such startups should be aware that investing in any early stage business can involve substantial risks.

With full access to their pension pores at the age of 55, people should be wary about putting their entire savings into unusual investments, because often they are not as good as they appear and may be hard to get out of without having to pay hefty fees. Many are also unregulated by the FCA (Financial Conduct Authority) which means if something does go wrong, there may be no comeback or compensation. People should always get advice from an independent and qualified professional when considering any investment.

With the advent of auto enrolment which will see a significant increase in the amount of people with workplace pensions, it is likely that the number and variety of more unusual ways to invest pension savings will continue to increase.

  • Author Profile
    • Sp avatar Smart Pension

      Smart Pension was founded by experienced finance & technology professionals and has been designed specifically to support UK business…