It has started. Following George Osborne’s ‘revolutionary’ pensions pronouncements in the Budget, it would appear everyone and his brother are now assuming (incorrectly) all 55-year-olds will automatically cash in their pension and conduct a search for better returns.

Accordingly, the scramble to promote products which will, apparently, fill the void left by compulsory annuity purchase resembles a passage from Alice In Wonderland.

Equity income funds now come in a bottle labelled ‘Try me!’ while bond funds can be found in garishly-coloured containers proclaiming ‘I am the one!’ Meanwhile, global dividend funds, concerned at being ignored by the new wave of retirees taking charge of their pensions, have been hastily wrapped in seductive packaging.

Pull the small cord to the side of the package and the voice of an alluring temptress says: ‘Look at me. I would be good for you.’ In other words, those people mulling over the myriad options available for soon-to-be-released pension funds should, unlike Alice, tread carefully and, ideally, seek advice before doing anything rash or hasty.

Annuities might not offer fantastic returns at the moment, though as they have in the past, who is to say they will not do so again in the future?

Yet there is one area of prospective investment with which people feel inherently comfortable and because of this, it is likely to be even more heavily promoted over the coming years.

Our long-standing love affair with property means those advocating buy-to-let (BTL) as an income-producing alternative to annuity purchase are promised a receptive audience.

After all, we know about property — most folks can quote the value of their home to within £2.50 — while a surprising number of others can tell you how much that three-bed semi a couple of roads away would be worth if it had a new kitchen and bathroom.

But people considering venturing into the BTL market should be careful. Remember that if something looks too good to be true, then it probably is.

In one national Sunday newspaper recently, adjacent to a photograph declaring “Buy-to-let boom predicted,” a mortgage broker was quoted as saying that if a saver used £40,000 of their pension to buy a £200,000 house, they could get an interest-only mortgage at 4.99 per cent and then “about £2,000 in net annual income after paying the loan and landlord costs.”

I re-read this several times because it looked far too good and I am not sure it stands up to close inspection. I say this as someone who bought his first investment property in 1986.

Let’s say you buy a flat for £200,000. Remember, on top of this there is stamp duty (£2,000), Land Registry fees, legal fees, brokerage and mortgage costs, insurance and perhaps some decorative expense as well as the cost of furnishing the property.

On completion, you would be lucky to be facing a total bill of less than £209,000.

Assuming you were able to get a £160,000 interest-only mortgage at 4.99 per cent, that’s £7,984 a year. But wait! How are you going to repay the loan?

Oh, okay, we will ignore that for now.

Let’s assume that you decorate, furnish and let the flat the day after you complete. Impossible? Absolutely – but we are not taking void periods, when the property is unoccupied into account are we?

How about management?

Unless you are prepared to take phone calls from your tenants at 10pm on Sunday telling you that the boiler is leaking, you will probably want to have the property professionally managed.

Allow too for other annual expenses, including insurance and replacement costs.

In short, BTL is not a one-way ticket to easy money and that’s before you’ve considered even the shortest of void periods when the property fails to generate rental income.

Given a conservative estimate of annual outgoings plus the need to generate £2,000 a year in net income, this property will need to produce £12,482 a year, or rent of £1,040 a month.

Should you deem repaying the mortgage over 25 years, this will add £279.75 a month (£3,357) to your outgoings.

Assume one month’s void per annum and to provide an annual income of £2,000, the flat would need to generate £16,879, a gross, pre-tax return of 8.43 per cent.

To suggest such properties are readily available to would-be buyers is a fiction worthy of Lewis Carroll.