Property vs pension – what’s best for your retirement? The attractions of buy-to-let are waning, claims expert

‘My property is my pension’ is a popular notion, but what is the reality? Ian Dyall, head of estate planning at Tilney, thinks property fans are overlooking the drawbacks of giving buy-to-let investments too  big a role in retirement plans.

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Retirement planning: ‘My property is my pension’ is a popular notion, but what is the reality?

The British have a long love affair with the idea of owning property as a tangible evidence of wealth, but can a buy-to-let investment ever play a leading role in your retirement plan?

Owning a second property is regarded by many as a long term savings fund route, sometimes in preference to pension investing.

When used as part of an overall investment strategy, property certainly has a part to play.

People are attracted by the gains they have made on property in the past but a big part of the reason that property appears so profitable is that your investment is leveraged.

This means, for example, that on a £300,000 property you might put down a 10 per cent deposit of £30,000, but you get growth on the £300,000.

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Ian Dyall: 'While second properties were once seen as a crown jewel of an investment, they have become a lot less attractive in recent years'

That’s great when interest rates are low and things are going well financially, but it is a risk when things don’t go so well, particularly where some people have very large loans spread over multiple properties.

While second properties were once seen as a crown jewel of an investment, they have become a lot less attractive in recent years due to a series of tax changes.

There’s now an extra 3 per cent stamp duty on second properties and capital gains tax is payable at 28 per cent on property rather than 20 per cent for other assets for higher rate tax payers.

In addition to this, from April 2019 CGT will be payable within 30 days of sale whereas at present it is payable in the January following the end of the tax year of disposal.

The Government is also in the process of eliminating tax relief at higher rate on mortgage interest. From April 2020 there will only be basic rate relief available.

Wear and tear relief, where people could claim relief of 10 per cent of the rent on furnished rental properties whether they spent that amount or not, has been abolished. This is now limited to actual spending.

Finally, for properties you once lived in the period for which you could claim private residence relief after leaving the property was reduced from three years to 18 months.

Aside from the tax changes there are also the issues that have always applied to property. For example, property is illiquid which means that it can be difficult to realise in the short term and thus needs to be used in conjunction with other more liquid investments.

It is also notoriously difficult to sell in an emergency.

Rental income is a good source of funds but care needs to be taken if there is a potential for a period of non-rental, particularly if the rent is required to cover the mortgage.

There is also the hassle of maintenance to consider, the potential of poor tenants and the running costs - insurance, agents fees, replacements, decoration, repairs and so on.

You will also have to pay income tax at your highest rate on any rent collected.

Meanwhile, a pension has many tax advantages. You have tax relief at your highest rate on contributions, no CGT on gains and no income tax on income.

In addition, 25 per cent of the fund is tax free when taken and it the remaining fund is not subject to inheritance tax on death, whereas your property will form part of your estate.

The rest of the fund is tax-free if you die before the age of 75, and income tax is payable by your heirs as they with draw the funds if you die after that.

The funds are much more accessible after retirement and the obligation to buy an annuity has gone.

When assessing the returns made on property people often look purely at the rental yield and the gain in the property’s value.

Once they take into account expenses, periods that the property is empty and tax due the figures can look very different.

Property can have a role in a fully diversified investment strategy, but I would warn against it playing a major part in a retirement plan, particularly where large mortgages are involved.

As always, it is best to speak to a financial planner to fully understand all your options in this area.

The death of cells in the brain's spatial system could be the reason why elderly people are prone to getting lost, 

according to researchers. 

A new study compared brain activity patterns in a group of young and older adults as they completed a series of navigational tasks to shed light on why sense of direction tends to fade with age.

They found that an area of the brain that's central to spatial functioning becomes increasingly unstable with age in healthy adults and similarly in people with degenerative diseases such as Alzheimer's.

The findings could ultimately be used to not only slow the deterioration of navigation ability but also to diagnose and treat diseases that cause cognitive decline and give elderly people more independence. 

Researchers have found a possible explanation for why elderly people are prone to losing their sense of direction by locating instability in the brain's navigation system, shown in red above

The study by researchers at the German Center for Neurodegenerative Disease was published Thursday in the journal Current Biology. 

Spatial orientation and navigation are considered to be some of the most complex abilities of the human mind because they require processing a flood of information including sensory stimuli and balance cues from the muscles.

These skills have been found to deteriorate with age, which can compromise a person's independence later in life.

'When you move around an unfamiliar environment, it is perfectly normal to get lost. Yet, this tends to happen more often to older people. So far, we know very little about the underlying neuronal mechanisms of these navigation problems,' lead author Matthias Stangl said.

The study was designed around a hypothesis that the deterioration was related to grid cells, which are important to navigational processing. 

The researchers performed a series of experiments using virtual reality and mapping brain activity through functional brain imaging (fMRI). 

They split 41 healthy adults into two groups: a 'young' group with 20 participants between ages 19 and 30, and an 'old' group with participants between ages 63 and 81.

For the first experiment participants had to navigate through a virtual reality computer-generated environment while their brain activity were monitored.

In the second experiment participants moved along predefined paths in a real space and virtual reality environment with occasional stops where they had to estimate their distance and orientation relative to the starting point without being able to see or pinpoint its location.

'All things considered, young participants did better in navigation, which is in line with previous studies. However, we found an association between decreased navigational performance and deficits in grid cell activity,' Thomas Wolbers, the study supervisor and a DZNE senior scientist said.

The results showed that firing patterns in grid cells were less stable in the older group, possibly explaining why older people often struggle with spatial navigation.

Aside from their role in navigation, grid cells are used in other cognitive functions as well. 

Wolbers said the findings provide insights into neurophysiological changes in old age that may be used in designing treatments for diseases such as Alzheimer's that cause cognitive decline.  

'Assessing navigation performance and grid cell function could possibly facilitate early diagnosis of Alzheimer's and other neurodegenerative disorders,' he said.

How to spot Alzheimer's disease years before symptoms develop

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While more research is needed in this area, Wolbers said the findings lay the foundation for future studies on age-related decline in health adults and those with brain disorders. 

Bleak maps reveal where hopelessness is driving Americans to death with murder, suicide and overdoses

• Newly-published maps reveal the worst parts of the US for each 'despair death' 
• Drug overdose deaths have surged by 600 percent since 198
• While deaths from alcohol, suicide, and interpersonal violence fell overall in the last three decades, they have saw resurgences between 2000 and 2014
• Appalachia continues to be especially hard-hit by drug deaths, while violence strikes down more people in the South than anywhere else

Newly-published maps have revealed the parts of the US where drugs, alcohol, murder and suicide are killing alarming numbers of Americans.

Drugs – likely driven by opioids – emerged as the clear top killer in all counties, increasing by a jaw-dropping 618 percent across the nation.

Consistent with other recent research and anecdotal observations, these 'deaths of despair,' as one study called them, are not affecting all places in America equally, according to new research from the University of Washington.

The Appalachian states – like Kentucky and West Virginia – saw particularly staggering climbs in drug-related deaths, while suicides and deaths from interpersonal violence spiked in the Western states.

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Drug-overdose deaths increased in every county in the US between 1980 and 2014, but the steepest rise was concentrated in the Appalachian region

Much to the alarm of public health experts – not to mention the public itself – life expectancy in the US fell in the last two years.

Data and scientists alike point to drug overdoses as the driving force behind the consecutive declines.

As so-called 'despair deaths' surge, more Americans are dying younger, pulling the national average lifespan down further and further.

Drug-related deaths accounted for the loss of 63,600 lives in 2016, and two-thirds of those were from opioids.

The new research, published in JAMA, showed an increase in drug-related deaths in all counties in the US over a broader stretch of time between 1980 and 2014.

But as scientists have scrambled to find a root cause – and, perhaps, a fitting solution – for the opioid crisis, it has become clear that the effects of the crisis are as widely varied as the epidemic is widespread.

Though the new study does not delve into the forces driving higher drug-related death rates in some places than in others, its findings were consistent with other studies that have linked poverty, poor health care access and rural areas with higher overdose rates.

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Alcohol-related deaths decreased over time in the US, but remained higher in the Western US

'Drug use disorders increased in every single county, in hardest hit counties there were increases of more than 5000 percent. That’s a truly remarkable number,' said lead study author Dr Laura Dwyer-Lindgren, an assistant professor of global health at the University of Washington. 

The Appalachian region of the US has, for years, suffered from higher rates of despair deaths, deaths from heart and lung disease, injuries cancer and diabetes than the rest of the country as well as surging infant mortality.

Somewhat encouragingly, in the last 34 years, the rates of other despair deaths – including those related to alcohol and violence - have fallen in the US overall.

But the good news is tempered by spikes in these mortality rates seen in particular regions, and in recent years.

'Broadly speaking, mortality from alcohol use disorders, suicides, and homicides has gone down since 1980, but this hides individual counties where the opposite is true,' said Dr Dwyer-Lindgren.

'Progress overall doesn’t mean progress for everyone, and we hope that this research can be used to identify communities that are struggling and highlight where there are opportunities for improving health,' she added. 

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Suicides became became less common between 1980 and 2014, and yet in 2016, they were at a 30-year high 

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Though there was a decrease in deaths from interpersonal violence in the US, higher rates were consistently found in the South and in areas where gun ownership was more common

Since 1980, alcohol-related deaths declined by about eight percent in the US, but there was a three percent spike between 2000 and 2014.

Suicide or self-harm deaths have dropped by six percent in the long-run, but surged 11 percent in the most recent time window.

'Deaths from self-harm were particularly high in regions of the Western United States with high rates of firearm availability and relatively low population density,' the study authors noted.  

The same was true for deaths from interpersonal violence, which was highest in many of the same, Western areas of the US.

Although the rates and hotbeds of these various deaths of despair vary widely, researchers are investigating potential links between them, especially as their upward trends track each other so closely. 

 Progress overall doesn’t mean progress for everyone, and we hope that this research can be used to identify communities that are struggling and highlight where there are opportunities for improving health

Dr Laura Dwyer-Lindgren, University of Washington professor of public health and lead study author

As opioid deaths soar, suicides hit a record-high for the last 30 years. 

'Even though mortality rates from suicides declined for the US as a whole from 1980 to 2014, a majority of counties experienced an increase over this period,' said Dr Dwyer-Lindgren.

'I found this a pretty striking reminder that what we see at the national level may not reflect what’s going on in many parts of the country,' she added. 

Some research has found links between increased risks of mental health issues and suicide among those who battle drug addiction, and it certainly makes anecdotal sense. 

But, when it comes to the overlap between drug-related and self-harm deaths, it is difficult to quantify the overlap. 

A 2015 study on the relationship estimated that about 54 percent of opioid overdose deaths reported to emergency departments were unintentional. 

There was, of course, no way to determine the last thoughts and intentions of the other 45 percent. 

Regardless of the intent, it seems that reductions in drug abuse could, at least, curb rates of accidental deaths from self-injury as well. 

Moreover, all of these kinds of deaths are 'particularly important because they are preventable and because they tend to affect younger individuals than many other major causes of death,' Dr Dwyer Lindgren said. 

Could THIS lead to a cure for deadly kidney disease? Scientists discover it can be triggered by microscopic 'shuttles'

• The microscopic exosomes are approximately 1,000 times thinner than hair
• The tiny vesicles transport a damaging enzyme that leads to kidney fibrosis
• This is the main cause of kidney disease - which strikes 2.6 million in the UK
• There is no cure and thousands of patients rely on life-saving dialysis
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A cure for kidney disease could be in the pipeline after scientists discovered the killer disease can be triggered by tiny 'shuttles'.

The microscopic exosomes - 1,000 times thinner than hair - transport a damaging enzyme that leads to fibrosis of the kidney.

Fibrosis, or kidney scarring, is the primary cause of kidney disease - which strikes roughly 2.6 million people in the UK. 

There is currently no cure and patients whose organs go on to fail, the end-stage of the disease, need dialysis or a transplant to survive.

The new findings, led by Nottingham Trent University researchers, offer hope of a way of stopping the disease in its tracks.

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The microscopic exosomes - 1,000 times thinner than hair - transport a damaging enzyme that leads to fibrosis of the kidney

Scientists hope they will be able to block the microscopic vessels, which are 100 nanometers wide and transmit transglutaminase-2 (TG2).

Dr Elisabetta Verderio, lead author, told MailOnline: 'This is a major marker for kidney disease development.

'To play a role in fibrosis, TG2 needs to get to the right location where fibrosis forms, outside the cells. We know that TG2 doesn't travel alone.

'We now need to look at how we can target these tiny vesicles as a means of controlling, or interrupting, fibrosis before serious problems occur.

'It is also possible that we could look at TG2 in these vesicles as a way of diagnosing the disease earlier. The more we know, the more avenues we have to intervene.'

Kidney disease costs the NHS £1.5 billion each year - but charities warn this could soar because it is becoming increasingly common.  

Staggering figures show the number of people dying from kidney disease have roared by 31 per cent in the space of a decade.  

The organs completely fail in around one in 50 patients, according to the NHS. This is when the sufferer can be listed for a transplant.

Others are given dialysis - a procedure that removes waste products and excess fluids from the blood when the kidneys stop functioning properly.

WHAT IS KIDNEY DISEASE? 

Our kidneys filter out waste products from the blood before converting them into urine. They also help maintain blood pressure.

Chronic kidney disease (CKD) is a long-term condition where the kidneys do not work as well as normal.

CKD is very common and the risk increases as you age. It is also more common among south Asian and black people.

CKD does not usually cause any symptoms until it has reached an advanced stage. It can be detected early on via blood and urine tests.

The main symptoms of advanced kidney disease include tiredness, swollen ankles or hands, shortness of breath, nausea and blood in urine.

Those with the condition have a greater risk of having a stroke or heart attack. It can also cause kidney failure, when sufferers will need to have dialysis and possible transplant.

However, lifestyle changes and medication can stop it getting worse if it's diagnosed at an early stage. Kidney disease can be caused by other conditions that put a strain on the organs, such as high blood pressure and diabetes.

However, evidence shows fibrosis, which is deemed largely irreversible, plays a 'key' role in the onset of kidney disease. 

Researchers from Sheffield University and the CNR Institute of Neuroscience in Milan also chipped in to the latest project to find a cure.

It delved into how an enzyme known to cause kidney scarring was transported from the cells to perform its damaging action.  

Transglutaminase-2 (TG2) was first identified as a trigger of kidney scarring by the Trent and Sheffield researchers back in 1997. 

Scientists used pioneering new technology to detect all TG2-associated proteins in simulated conditions of kidney disease. 

They were then able to identify how TG2 left the kidney cells to cross-link proteins like collagen and fibronectin, leading to fibrosis.

This is when they discovered that the damaging enzyme is transported through the body via the nano-sized exosomes.

Researchers confirmed their findings by screening the urine of 10 kidney disease patients. Samples showed TG2 was being carried by the exosomes.

The results, published in the Journal of the American Society of Nephrology, have been welcomed by experts.

Elaine Davies, director of research operations at Kidney Research UK - which funded the study, is hopeful it could revolutionise treatment.

She said: 'Kidney failure is life-threatening and caused when the kidneys no longer function normally due to irreversible scarring within its structure.

'This biological mechanism research finding is helping us build our understanding about scarring.'

Ms Davies added that it will 'help us to find the tipping point where kidney scarring changes, from being reversible to irreversible'.