MSE News: Pension age rise bought forward

Pincher

hugheskevi wrote: »

That is the same as my thieving house insurers - they took my money, and just because my house didn't burn down, they didn't give me back A PENNY!

I think you'll find the deal here is you pay a one off £200,000 premium upfront, for a house whose rebuild cost is £200,000.

Admittedly the risk of you dying is greater than the house burning down, but it's still a terrible deal. Most intelligent person would go down the self-insure route. Remember the annuity rate you get includes a profit margin for the annuity provider.

The only reason I would get an annuity is because the law puts a gun to my head.

Pincher

dunstonh wrote: »

You can do that.

Assume I have £200,000 in three pension funds, none of them final salary to keep it simple. At retirement age, be it 65, 67 or 68, I would like to take out £150k, for buying a yacht, plus provisions and cash reserve, for sailing round the world. The remaining £50,000 should go to my designated beneficiary, should I become a victim of Somali pirates.

How can I do this?

None of the the pension fudns are SIPP.

PasturesNew

This would be OK if there were enough jobs to go round ... but while working people are being forced to stay in jobs, it's job-blocking for younger people.

grumbler

..bought forward...

English is not my first language. I would have thought that "bought" was a typo if it was not repeated at least three times at MSE.
Does "buy forward" combination mean anything? Googling for "bought forward" brings just two resuslts: some totallymoney.com ("Pension reform could be bought forward, ...) and MSE.

If it really is a typo, feel free to delete my post after correcting it and firing the proofreader.

EDIT:I see now it was a typo and you decided to let the proofreader to stay. After two corrections it still remains "bought" in the "KEY POINTS" and in the title of this thread.

Martin, are you not ashamed of your team that keeps letting you down?
Was it not you who wrote this: The word pedants’ top 10 | It’s specific, not Pacific | You didn’t ‘literally’ die. ?

jamesd

Gracchus_Babeuf wrote: »

Many people on modest incomes of say, £25k a year or less...

If that person is getting the expected basic plus additional state pensions of £7,000 a year they could switch to spending at £7,000 a year rate and save to get the income needed to cover the rest of the year. Ignoring tax for the moment, that's £2083 a month income spending a state pension rate of £583 a month. After three months they would have saved £4,500, enough to cover almost 8 months of state pension income, so they could retire after a delay of less than four months.

Tax can be ignored because they would be entitled to a refund. Their income for the year would be less than their personal allowance.

Pincher wrote: »

If I had £200,000 in a pension fund, I don't want to give it to some insurance company, who gives me £10,000 a year, which I can't live on, and then when I die at 73, I have only got back £80,000. ...I want to have a custodian of my money, who will give a decent interest for long term deposit, and who will hand the remainder money over to my heirs because the Probate Office is watching.

You can do that with income drawdown. There's not even a tax charge provided the pension capital is paid into a pension for them.

Pincher wrote: »

Assume I have £200,000 in three pension funds, none of them final salary to keep it simple. At retirement age, be it 65, 67 or 68, I would like to take out £150k, for buying a yacht, plus provisions and cash reserve, for sailing round the world. The remaining £50,000 should go to my designated beneficiary, should I become a victim of Somali pirates.

Pension tax relief is for providing long term pension income, not buying a yacht. You can't do that with a pension and only a £200,000 pension pot.

Assuming that you have £7,000 from the state pensions and buy a level annuity of £13,000 at a state pension age of 67 you would reach the £20,000 threshold for flexible drawdown and could take the rest of your pot as one lump taxed as normal income. Unfortunately that would use all of your £200,000 fund to buy the annuity so you would have no money left over to buy the yacht.

You could instead buy a smaller yacht for the £50,000 lump sum and take a reduced income. Say a change from a new 2011 12m Jeanneau Sun Odyssey 409 to a used 12m 1988 Jeanneau Sun Legend 41 or used 2003 10m Jeanneau Sun Odyssey 32. Or you could use credit to buy the yacht and use the income from investments to repay the loan. If you die your pension pot is outside your estate and the yacht loan amount outstanding is an unsecured loan that your estate may not be able to pay.

Moby

dunstonh wrote: »

It wouldn't have to if the previous Government didnt make such a mess of things.

You really have a bee in your bonnet about people who work hard and generate wealth for the country. If you keep penalising the wealth generators and the large taxpayers (who already pay more than their fair share) then they will move away and pay their tax in other countries. Who will pay the tax needed then?

...so naive and so many assumptions and judgements about 'people who work hard' as against the poor with their flat screen TV's etce..... as if people generate wealth for the 'good of the country'. They do it for themselves actually! They are driven by financial motives....definitely not thoughts of the general well being....its called self interest.
We live in a society which is driven by capitalist values and believes in the free market...... so if people living in that society are giving no consideration for their future and living for today etc, not saving for their futures etc., buying flat screen tv's with their benefits etc; perhaps before jumping to simplistic explanations and moral outrage about such !!!!lesness...... remember its the very same consumer, market driven, advertising saturated society that got us here and encouraged those values. So many people forget this.

gadgetmind

Moby wrote: »

... as if people generate wealth for the 'good of the country'.

Actually, most of them are *fiercely* proud of their country, and work hard to try and keep a strong UK base, but the UK's historical anti-success stance tends to drive many of them overseas.

If a growing company has a few sites across the globe, do you think they will expand headcount in those areas that nurture expanding companies or those that try and tax success into extinction? If bright people have a choice of the company's sites to work in, do you think they will choose the one that encourages hard work by letting people retain the fruits of said labour or one in a country were hard work is discouraged by punitive taxation?

If a company has to contract, which site do you think they will contract fastest and perhaps even close down?

Anyone who doubts this really needs to work in the management structure of a large multi-national for a few years as they'd soon realise how easy it is for a country to kill the geese that lay the golden eggs.

Of course, we do have people like Dyson who are so proud of their country that they do manage to cling on, but they are swimming against the tide.

dunstonh

...so naive and so many assumptions and judgements about 'people who work hard' as against the poor with their flat screen TV's etce

I cannot see any such statement that indicates that other than yours.

gadgetmind

dunstonh wrote: »

I cannot see any such statement that indicates that other than yours.

I mentioned flat screen TVs, but only in the context of people who *claim* to be too poor to pay into a pension yet seem to have plenty of money for here-and-now luxuries.

dunstonh

gadgetmind wrote: »

I mentioned flat screen TVs, but only in the context of people who *claim* to be too poor to pay into a pension yet seem to have plenty of money for here-and-now luxuries.

I'm getting blamed for your posts then

However, now we are on that particular topic..... If the wealth generators went away, unemployment would go up and tax revenue would fall. That would leave an increasing number not paying tax and those that are left having to pay more. So, if they are low earners and enjoy the benefit of a widescreen tv that is bigger than their lounge, then perhaps they shouldnt be so against higher earners. Without them, they wouldnt have that widescreen tv.