Let people borrow from their pensions

Going4TheDream

Percy1983 wrote: »

I suppose the economy maybe be suffering short term as people aren't cashing as much HPI to spend, on the flip side having a whole generation have lower mortgage payments for the next 25 years will do wonders for the economy.

Percy... I have watched your sig with interest...nice to see if finally going up

RenovationMan

You can cash in a pension under the Triviality rules, provided your combined personal pensions are less than £18k in total. http://www.pensionsadvisoryservice.org.uk/workplace-pension-schemes/final-salary-schemes/cashing-in-pensions-(triviality).

You have to be over 60 yrs and you get 25% of the pension tax free and pay tax on the remainder.

There was a move to allow people who are really cash strapped to access their pension funds, but this would be madness because all you are doing is moving your financial problems to your old age when you can't even work your way out of your problems. Seeing as you can be made bankrupt and still have your personal pension untouched, you'd have to be mad to take money from your pension to prevent yourself being made bankrupt.

You're a long time in poverty if you retire and only have the state pension to rely on.

Linton

Oh dear, here we go again...

If you increase the amount of money that people have for buying houses what will happen??

Well those new buyers would be able to outbid each other to get the house they want which means house prices would go up.

Net effect - the same people get the same houses, but they pay more for them AND they lose their pension. Doesnt seem like a good idea to me.

Really2

chewmylegoff wrote: »

i'm not sure about common consensus being to not transfer out less than £10,000 of value, but if you had £1,000 sitting in a scheme that was frozen in the way you describe, and you weren't going to retire for some time, it would be likely to be worth transferring it out in almost any circumstances (unless the cost of transferring it out was £1,000), because, as you say, when you reached retirement age it would be worth nothing in real terms.

That is basically my point, after costs (FA etc) it is not worth touching many.

I am aware frozen does not mean it does not carry on growing, but if the scheme is rubbish it may be virtually worthless in the future.

It would be good if frozen funds could be withdrawn easier or switch easier without it being so cost intrusive.

Percy1983

Going4TheDream wrote: »

Percy... I have watched your sig with interest...nice to see if finally going up

Thanks, the next few months will be where it really starts clocking up a decent figure.

Pennywise

It would just push up (keep up) high prices artificially which is bad, AND it would reduce the money flow for investments, i.e. stocks & shares, etc., which would reduce the value of traded investments which is bad.

What we need is for all commodity prices, whether it be houses, or stocks & shares, or whatever to be realistically priced in the first place, rather than being valued based upon likely future capital appreciation.

In my opinion, virtually all traded items, whether housing, commercial property, stocks & shares etc are grossly over-valued, so doing anything artificial to prop it up isn't a good idea. We need a gradual decline in values back to more reasonable levels.

RenovationMan

Linton wrote: »

Oh dear, here we go again...

If you increase the amount of money that people have for buying houses what will happen??

Well those new buyers would be able to outbid each other to get the house they want which means house prices would go up.

Net effect - the same people get the same houses, but they pay more for them AND they lose their pension. Doesnt seem like a good idea to me.

Some people have argued that property has been a better investment than traditional pensions over the last 20 years. I'm happier having a more diverse portfolio than 100% property, with a money purchase pension, career average pension and my home will also form a large part of my retirement money when I retire.

I'm fortunate enough to not to have to dip into any of my pensions, but I can see the attraction to FTBers. The flaw in the plan is that FTBers are probably unlikely to have large pension pots anyway.

ruggedtoast

The "Rent Us Your Kidneys" scheme will follow shortly I am sure.

Cleaver

Graham_Devon wrote: »

Ridiculous if you ask me.

Wages are not enough, bank loans are not enough....so why not use your pension to buy your first home?!

When you have a society, governent and instutions that seem hell bent on ensuring prices don't fall you'll see people invent wonderful and 'innovative' products to enable people to buy. This is just 125% mortgages in a different format.

We need people to realise that house prices falling will enable more people to buy and the housing market to work again. The people in charge will never let this happen. That's why I think we won't see house price falls and why we'll continue to have a dysfunctional, stagnant housing market for years and years to come.

somethingcorporate

RenovationMan wrote: »

I'm fortunate enough to not to have to dip into any of my pensions, but I can see the attraction to FTBers. The flaw in the plan is that FTBers are probably unlikely to have large pension pots anyway.

+1 to that!

People <30 years old, unless in amazing jobs, have small to no pensions anyway. Raiding the lot as a deposit to leverage massive debt against seems a stupid idea. Not only are they going to be losing compound interest over decades but that investment is going to start to cost them money. Plus, if they lose their house they also lose their pension - at least if you lose everything now the pension stays safe in trust.