Property better than a pension, says Bank chief

A BANK of England boss believes owning property is better than a pension for building up retirement funds.

Chief economist Andy Haldane said the country’s property shortage meant house prices had risen – and will continue to rise – “relentlessly”.

The 49-year-old, who owns a house in Surrey and a cottage in Kent, was asked in an interview published yesterday if property or pensions were “better for retirement”.

He said: “It ought to be a pension but it’s almost certainly property.

Relentlessly

“As long as we continue not to build anything like as many houses in this country as we need to meet demand, we will see what we’ve had for the better part of a generation – house prices relentlessly heading north.”

Mr Haldane caused controversy in May when he said he could not make “the remotest sense of pensions”.

Yet with a basic salary last year of just over £182,000 he is in line for a pension of nearly £84,000 a year.

To buy such a pension in the private sector would require a savings pot of about £3.5million, experts calculate.

His comments have sparked criticism from former pensions minister Baroness Altmann, who hit back insisting: “For him, pensions aren’t complicated at all – the taxpayer takes care of the whole thing.

“The Bank of England pays more than 50 per cent of each worker’s salary into a generous final scheme – he doesn’t have to think about a thing.

“The irony is that Bank of England policies have done so much to damage ordinary people’s pensions. Ultralow interest rates have destroyed savings incentives and undermined defined benefit pensions.”

Regarding property investment, she said: “No one should put all their eggs in one basket, especially one that’s in a bubble as a result of policy pursued by the Bank of England.”

Neil Duncan-Jordan, of the Pensioners Convention, added: “Andy Haldane is living in a rather glorified bubble. Most people can’t afford to buy one property so they can’t use property as an investment.”

Mr Haldane was listed among the world’s “100 most influential people” in 2014. He became the Bank’s chief economist two years ago and sits on its monetary policy committee which sets interest rates.