Prestige Tax and Trust Services were intrigued by a recent report that suggests installing solar panels onto the roof of your house is a better investment than a pension. The current energy minister has said that solar panels will deliver a better pecuniary return than a pension, so anyone reaching retirement age should consider installation.
Currently 500,000 British homes have installed solar panels, allowing users to generate electricity and sell any excess power to energy firms. So while the installation itself can be costly, savings on bills and the ability to sell excess power mean households can actually turn a profit.
The Government are keen to encourage domestic users towards solar power and are offering to guarantee a price at which excess electricity can be sold on. While the Government did cut this price in 2012, households can still earn 21p per kWh for generating and using excess electricity and 3.1p per kWh for power that is unused and fed back to the national grid.
Solar panels are becoming more and more affordable every year. Typical domestic installation costs around £4,500, compared with £13,000 in 2010, which means return rates on domestic solar panels currently sit between 5 and 8 per cent a year.
Figures suggest that this makes solar power a better investment than some pensions. The majority of pensioners buy their retirement income by investing in an annuity (more information here). This guarantees them an annual income for the rest of their lives. However in recent years the returns on annuities have fallen, with incomes coming up noticeably short of saving investments.
Well-sited solar panels can yield returns of 8% or more. Installation comes with a 20 year guarantee and offers a bigger return than current annuities, especially for people currently in their 50s and early 60s. If you’re coming up for retirement, it may be worth your while to seriously consider solar power. However, this isn’t for everyone and it’s something you’ll need to think about carefully before going ahead.
Prestige Tax and Trust Services are available to discuss any plans for your future today. We can advise you on the best ways to secure your assets and ensure a comfortable future for you and your family. Visit our website for more details. You can also follow us on Twitter for regular updates.