While millennials have grabbed the recent headlines with their rush to incorporate their buy-to-let portfolios, Rachel Reeves’ upcoming Budget could hand a significant advantage to older investors.
If National Insurance is applied to rental income, as anticipated, those over State Pension age would keep their existing exemption from NI contributions. The arithmetic is simple: younger landlords would see their net returns reduced, while pension-age investors would maintain their full rental income.
Dr Neil Cobbold, Commercial Director at PropTech firm Reapit, suggests this could spark renewed investment from older landlords. “If National Insurance is levied on all rental income but the current exemption for those over State Pension age holds, these investors could see higher net yields than their younger counterparts, making property investment more attractive to retirees.”
Why incorporation doesn’t always work for older investors
The majority of younger landlords have incorporated their property portfolios so that they can access corporation tax rates and fully offset their mortgage interest—a relief denied to individual landlords since 2020.
For older investors, setting up a company presents some serious drawbacks. Many have held their properties for decades, accumulating substantial capital gains. Transferring these into a company structure triggers capital gains tax on those gains, making it prohibitively expensive. And as many older investors are cash buyers or have paid down their mortgages over the years, the ability to offset mortgage interest is not always a requirement.
The National Insurance exemption delivers an advantage without restructuring or triggering CGT, and its benefits apply automatically.
The demographic advantage
According to the English Private Landlord Survey 2024, 77% of landlords with five or more properties are aged 55 or over. This demographic therefore represents the vast bulk of larger portfolio holders—and they’re now positioned to benefit from a structural tax advantage.
This matters because it’s the first policy shift explicitly favouring experienced investors and should encourage them to remain in the sector. It comes at a time when there are growing concerns over an exodus of landlords as a result of the increasing legislative tax burden.
What it means for investment decisions
Whether it sparks the expansion of people’s portfolios, though, depends on individual circumstances—succession planning, debt appetite, and market timing. But for those with equity in existing properties, the NI exemption protecting returns, it is certainly possible. And it would mean that age mattered almost as much as mortgage rates, rental yields and capital growth when making investment decisions.
