Getting lucky in the property market is not 'providing for a long retirement'

Those lucky enough to be “asset-rich and cash-poor” might be better off selling up and using the money to fund their retirement, says Merryn Somerset Webb.


Brian Sewell: might be better off selling up and using the cash to fund a long retirement

In the Telegraph this week, art critic Brian Sewell writes about his "biggest financial fear". It is the mansion tax. If it goes through as Labour suggests, he says, it "would more than wipe out my annual income, and were I to live another decade, leave the house burdened with an enormous debt, compelling its sale."

It would he says, make him and thousands his age "wretched with anxiety", given that they are asset-rich and cash-poor and it would "attack the provident who instead of spending as they go have looked to the future and made provision for a long retirement, rather than depend on the state to rescue them from poverty". I can see a lot of these points.

Regular readers will know that, just like Cheryl Fernandez-Versini, we are very against the idea of a mansion tax. It's badly thought out; it would be an administrative nightmare; it would be an additional tax rather than a replacement tax; and of course it would soon be extended down the house-price league tables until everyone was paying it on their garden sheds.

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But there is one point in Sewell's objection list that doesn't ring quite true the claim that those who are asset-rich and cash-poor have "made provision for a long retirement". Many will have done their best to do so, but he doesn't appear to have done anything of the sort.

If his main asset really is his large Wimbledon house, he hasn't "made provision for a long retirement", he's merely been lucky enough to benefit from one of the greatest asset bubbles of all time.

And making provision for a long retirement today wouldn't involve attempting to hang on to his house until his death and passing it on to his heirs without an "enormous debt". It would involve selling the house and using the cash to create a long-term sustainable income.

Merryn Somerset Webb

Merryn Somerset Webb started her career in Tokyo at public broadcaster NHK before becoming a Japanese equity broker at what was then Warburgs. She went on to work at SBC and UBS without moving from her desk in Kamiyacho (it was the age of mergers).

After five years in Japan she returned to work in the UK at Paribas. This soon became BNP Paribas. Again, no desk move was required. On leaving the City, Merryn helped The Week magazine with its City pages before becoming the launch editor of MoneyWeek in 2000 and taking on columns first in the Sunday Times and then in 2009 in the Financial Times

Twenty years on, MoneyWeek is the best-selling financial magazine in the UK. Merryn was its Editor in Chief until 2022. She is now a senior columnist at Bloomberg and host of the Merryn Talks Money podcast -  but still writes for Moneyweek monthly. 

Merryn is also is a non executive director of two investment trusts – BlackRock Throgmorton, and the Murray Income Investment Trust.