Retired police officer David Cuthbertson always holidayed in Northumberland. So, in 2008, he decided to invest in a £185,000 two-bedroom, holiday cottage in the area to enjoy when he retired.
But David, now 64, has found that he relies on the extra income generated through renting out the cottage as a holiday let to fund his retirement.
Last year, his cottage, in Warkworth, Northumberland, generated over £8,000 in profit (after expenses), which went towards his living costs alongside his police pension.
“The income from my cottage now tops up my pension and I use it to fund my holidays,” David said. “I bought it as an investment to stay in, but it’s turned into something that generates a lot of additional income and that’s hugely benefitted my retirement.”
The police pension scheme is a defined benefit (DB) scheme, which means you get a guaranteed income for life in retirement based on your years of service. It is considered a generous scheme with a higher employer contribution rate – currently 35.3 per cent.
But for many police officers – like other workers – it is still not enough to feel comfortable in later life. Many serving police officers also report struggling financially, leading to them opting out of their pensions, which will leave them with less to live on in retirement.
In a 2025 survey by the Police Federation, 64 per cent of police officers said they were struggling financially, with 42 per cent saying they had considered stopping paying into their pension over the past 12 months as a result.
After buying his home, which he saw in a newspaper advert, David quickly realised he could make some extra money by letting it out when he wasn’t using it. His cottage, which he lets out through Sykes Cottages, is already booked for 45 weeks this year.
He said he found the most success by allowing other people to bring their dogs, as many holiday properties don’t allow pets. This has increased his revenue by around 16 per cent per year.
David is one of thousands of pensioners turning to property to help fund their retirement. The latest English Private Landlord Survey found 42 per cent of landlords invested in property to fund their retirement, while 56 per cent said they expected it to contribute to their retirement income.
And according to the Financial Conduct Authority’s most recent Later Lives survey, 7 per cent of retirees said they expected rental property to fund their retirement, up from 4 per cent in 2020.
Graham Nicoll, a chartered financial planner at NCL Wealth Partners, said: “We are seeing a clear uptick in retirees turning to property income as pensions fall short and longevity increases.”
Nouran Moustafa, an independent financial adviser at Roxton Wealth, added: “I am seeing more interest from clients who want retirement income beyond pensions. Property can play a role, but it should sit within a wider retirement plan, not become the whole plan.”
Should you invest in property for retirement?
While investing in property to fund retirement is becoming increasingly popular, there are some pros and cons to consider – as well as different ways to use the property, depending on your circumstances.
For example, some people prefer the stability of long-term letting, while figures suggest holiday lets can be more profitable, but require more regular maintenance and attention – which you may not want or have time for in retirement.
Data from Sykes Holiday Cottages shows that holiday lets in Castleton, Derbyshire, a top holiday let spot, on average earn £38,200 per year – more than the average income in the UK.
Meanwhile, homes in Bowness-on-Windermere in Cumbria typically make £36,200 per year, while properties in Matlock, Derbyshire, Ambleside and Durham typically earn around £34,000 a year.
On the other hand, the average rental income for a long-term landlord in the UK is currently £19,400.
Nicoll said that while investing in property to supplement your pension “can work”, it is important to remember that it not “passive” income.
“Long-term lets can provide steadier income with less volatility, but yields are often modest and tenant risk remains. Holiday lets may deliver higher gross returns and greater flexibility, yet income is seasonal, management is more intensive and regulation is increasing,” he said.
“Costs, void periods, tax changes and regulation have all eroded margins. Property can be a useful supplement, but it is not a silver bullet.”