Properties are better than pensions, says top Bank economist

PROPERTY is a better investment for retirement than a pension, the Bank of England’s chief economist has claimed.

Andy Haldane said putting money into bricks and mortar was a better bet to give people a nest egg when they finished work.

But he was accused of being ‘divorced from reality’ after the controversial comments.

Mr Haldane, 49, also said he did not consider himself wealthy, despite a basic salary of £182,000 and a gold-plated pension that will pay him nearly £84,000 a year when he retires. To buy such a pension in the private sector, you would need a pot worth £3.5 million.

He owns two homes – one in Surrey and a holiday home on the Kent coast – and chose property rather than a pension when asked which was best for retirement planning.

He said: ‘It ought to be pension but it’s almost certainly prop- erty. As long as we continue not to build anything like as many houses in this country as we need to… we will see what we’ve had for the better part of a generation, which is house prices relentlessly heading north.’

Mr Haldane added: ‘ I see myself as not having to worry about money, but plainly not wealthy. I never have [ felt wealthy], and never expect to in this job.

‘I’m in a position where I don’t have to worry about money when paying for the things in life my family needs.’ The economist placed the blame for not feeling wealthy partly on his decision to educate his three children privately. He told The Sunday Times: ‘They are among the reasons why I don’t feel wealthy and never will, I imagine.’

But Mr Haldane’s advice was criticised by Baroness Altmann, the former pensions minister under David Cameron. She said his comments were ‘divorced from reality’ and that it was ‘irresponsible’ to suggest people should rely on property rather than pensions.

Mr Haldane, who in 2014 was named by Time Magazine as one of the world’s 100 most influential people, was a member of the Bank’s Monetary Policy Committee, which recently voted to cut interest rates by half to 0.25 per cent.

In May, he caused a stir by admitting he could not make ‘the remotest sense of pensions’, despite being one of the country’s leading economists and working at the Bank of England since leaving the University of Sheffield.

He told industry peers that complexities in personal finance bred mistrust of the system, adding: ‘To give a personal example, I consider myself moderately financially literate. Yet I confess to not being able to make the remotest sense of pensions.

‘Conversations with countless experts and independent financial advisers have confirmed for me only one thing – that they have no clue either.’