Over 50s: what will you do with your tax-free cash?

EdInvestor

As of tomorrow, anyone who is aged 50 or more can take out 25% of their private pension fund in tax-free cash and leave the rest of the fund to grow until they retire, without taking a taxable income. This will apply to some company pensions as well.

:beer:

So what will you do with your money? Some suggestions:

#Pay off debt
#Pay off some of the mortgage
#Invest it in a cash or share ISA
#Buy a BTL
#Help my children get on the housing ladder
#Leave it where it is

Spend, spend, spend?

Surely not.


Any thoughts?

exil

I still have 3 years to go to the magic half century - Saga holidays, cheap car insurance etc!

Company pension. In theory I could retire at 50, but pension would be actuarily reduced so it's a non-starter. Assorted savings plans, ISAs, old pension plans, not enough to live on though. House not worth enough to downsize. Looks like work is the only option. Not complaining, many people aren't in a position to work at a reasonably paid and fulfilling job.

[Deleted User]

We shall be boringly sensible as the whole main pot has to keep us in comfort for the rest of our lives. Tax free cash: into different baskets in best savings accounts while always mindful of fsa compensation limit, solid high yielding blue chips in dealing accounts to maximise capital gains allowance and provide income, feed my sipp as I am not withdrawing cash for years to come and will live on what my DH provides.

We`ll also be taking several holidays per year (saga type or cycling etc) and handing cash sums year on year to our children. Not going mad but no debts to face as we sail into retirement

exil

Trouble is - if you're 50 you could last for another 70 years!

This is the problem with the whole pensions question. Govts, finance advisers, etc are trying to plan for people starting work at 16, who could still be alive and drawing a pension in the year 2110!

margaretclare

Hi

I'm planning to put my 25% that I get from my Friends Provident stakeholder towards the £4000 needed for my new roof (the rest will come from my and my DH's other savings). I'm not 50 BTW, I'm 70.

I'm transferring the remaining 75% to a SIPP with Hargreaves Lansdown. Have filled in forms etc and sent them to and fro. However this is all taking an incredible time, with FP failing to realise (a) what I want to do and (b) whether it can be done. I spoke to 3 people at FP this morning. The first said: 'oh no, you can't do that, you can only have your 25% if you use the rest for a pension'. I explained that I don't want another annuity and from this week, I don't have to have one. 'Have you asked HL - are they willing to do this for you?' Well, I wouldn't be talking to you about it if I hadn't ascertained that first, would I? In any case, they've written to you and had a reply quoting the final amount. This person went away to ask someone - yes you can do it, yes, the rules are changing, I'll put you through to Pensions. The next person I spoke to was patronising - the Government is changing the rules. Yes, I know that. I know what the changes will be. Oh. Yes, they could do it, but they would have to write to me (which will take until next week), they need my reply, it can't be done by any of the quicker and more modern means of communication. I actually wrote to them a week ago and faxed the letter, so I know they've had my wishes in writing. A suggestion was made about 'triviality' - no, that doesn't apply to me, my total is above £15,000. Oh. Patronising, or what?

Like Kittie, I am still saving and investing - my new equity ISA starts this week. We didn't mean it to work out that DH is the provider, but my income at present is mainly 'disposable'. DH pays for food and petrol, car insurance etc and we have a joint account that we both tip into for household bills. He does manage to save, but we do it differently. I 'pay myself first', he transfers whatever is left in his current account at the end of the 4-week period when the next lot of SRP gets paid in. Usually he manages about £200 per 4 weeks into his cash ISA.

Margaret Clare

bobobrussel

EdInvestor wrote:

As of tomorrow, anyone who is aged 50 or more can take out 25% of their private pension fund in tax-free cash and leave the rest of the fund to grow until they retire, without taking a taxable income. This will apply to some company pensions as well.

Can someone explain this to me? Is it true? Does this apply to all pension schemes? Can I just write to my pension company and demand my 25%

EdInvestor

bobobrussel wrote:

Can someone explain this to me? Is it true? Does this apply to all pension schemes? Can I just write to my pension company and demand my 25%

It applies to all personal pensions.It's likely to apply to all money purchase company pensions, though not all companies may have yet adjusted their regulations to apply it.The same case with AVCs and FSAVCs.

It's much less likely to apply to final salary company pensions, and if it does, you could be disadvantaged by doing it. But no doubt Pal and DFC can tell us more on the state of play at company pensions, current and deferred.

cattie

exil wrote:

Trouble is - if you're 50 you could last for another 70 years!

!

Oh no, not me please

Weymouth_Man

:j SPEND, :j SPEND,:j SPEND Sounds good to me, interesting question, What about buying property as an investment, Pro's & Cons Please ? :beer:

christabell

Having been on long term Incapacity Benefit, Income Support, and DLA due to Chronic Illness I got my april "pay rise" (NAO Rossi Index) I am damned if I can decide on what to spend my 4 pence per week on......All suggestions would be welcome!


single people on benefits live in poverty

[Deleted User]

WM re property. It is good to spread assets into different baskets. You may already own your own home, so take that into account as a % of your total assets. Investing in property may take you into being too heavily skewed into property

We have always felt personal responsibility for our financial wellbeing and I am very happy to say that we are about to reap the reward of being prudent all through our lives. Four foreign holidays in the past 35 years and the benefit to come has been well earned. We have had very happy lives to date but always with a thought to the future