Will the age that private pensions can be accessed at ever change?

stinktankcynic

jamesd wrote: »

The government can also abolish ISA tax relief, introduce a tax on ISAs or do other things that harm them. Same for residential property, perhaps introduce another property tax on top of council tax and a surcharge on high value homes.

Indeed they can. They could also raise income tax to 75% for people earning over £200k, but they won't do that.

jamesd

Well, not until the French do it successfully and don't chase everyone off to Russia...

kidmugsy

jamesd wrote: »

The government can also abolish ISA tax relief, introduce a tax on ISAs or do other things that harm them. Same for residential property, perhaps introduce another property tax on top of council tax and a surcharge on high value homes.

The generous CGT treatment of BLT properties is an inviting target. Someday, owner-occupied too? The public finances are in ruins. Thanks, Gordo.

bigadaj

True. Personally I think that removing g the cgt exemption on houses would have an overall beneficial effect, would automatically damp down excessive house price inflation when the Bank of England fails to raise interest. Rates appropriately.

grey_gym_sock

ISAs do have the advantage over pensions, that if they change the rules and they become unattractive, you can take all your money out ASAP. so it's reasonable to worry a lot more about the risk of rule changes making pensions less attractive.

pensions look better if there are matching employer contributions (obviously!), or you're getting relief at least 40% or more on your contributions, or you're near to drawing the pension (so there's less time for the rules to change), or if you would be incapable of refraining from spending the money if it wasn't in a pension, or if you're only prepared to invest inside a pension (i.e. if you insist on keeping everything outside in savings accounts for the long term).

if none of those apply, perhaps lob in bit into a pension anyway (i.e. spread your bets), but S&S ISAs might be better.

stinktankcynic

grey_gym_sock wrote: »

ISAs do have the advantage over pensions, that if they change the rules and they become unattractive, you can take all your money out ASAP. so it's reasonable to worry a lot more about the risk of rule changes making pensions less attractive.

pensions look better if there are matching employer contributions (obviously!), or you're getting relief at least 40% or more on your contributions, or you're near to drawing the pension (so there's less time for the rules to change), or if you would be incapable of refraining from spending the money if it wasn't in a pension, or if you're only prepared to invest inside a pension (i.e. if you insist on keeping everything outside in savings accounts for the long term).

if none of those apply, perhaps lob in bit into a pension anyway (i.e. spread your bets), but S&S ISAs might be better.

I'm also wondering how much of your "pot" or "pots" is taken in charges when you try and convert it to an annuity?

hugheskevi

I'm also wondering how much of your "pot" or "pots" is taken in charges when you try and convert it to an annuity?

For a flat-rate annuity you would expect to get back 90% of your pot, and for an index-linked annuity you would expect to get back 75%.

Compared to other insurance products, this is very competitive.

Note that this is based on insurers backing the annuities with gilts - as gilt-yields are low, so are annuities. There is a good argument that given gilt yields are so low, it would be better to use alternative investments.

Reference here.

Rich1976

grey_gym_sock wrote: »

ISAs do have the advantage over pensions, that if they change the rules and they become unattractive, you can take all your money out ASAP. so it's reasonable to worry a lot more about the risk of rule changes making pensions less attractive.

pensions look better if there are matching employer contributions (obviously!), or you're getting relief at least 40% or more on your contributions, or you're near to drawing the pension (so there's less time for the rules to change), or if you would be incapable of refraining from spending the money if it wasn't in a pension, or if you're only prepared to invest inside a pension (i.e. if you insist on keeping everything outside in savings accounts for the long term).

if none of those apply, perhaps lob in bit into a pension anyway (i.e. spread your bets), but S&S ISAs might be better.

Don't forget though that if you just use S+S ISA's and the value of all your savings goes over a certain limit and you get made redundant you will be required to draw on the ISA before you can get JSA. This may well deplete your ISA fund which had been earmarked for retirement. Where as in a pension the money doesn't count towards JSA.

mark55man

Rich that is an excellent point that proponents of S&S ISAs often neglect.

atush

I point that out all the time lol.

Another thing is, should you be sued or go bankrupt (ie say you have your own business) Isas count as assets. So can be seized.

They are also available for impulse spending.