What does the Chancellors pension revolution mean for us?

billozz

atush wrote: »

Because those are the rules today.

they change next year in 2015?

so even though the rules have changed they dont actually come into being until next year ? sorry i am a bit thick when it comes to this sort of thing !

OldBeanz

There are cosmetic changes being brought in immediately but the monster change (do what you want with your pension no matter the amount) has to go through parliament so will not be enacted for another year.

System

Triumph13 wrote: »

Having seen a relative in Australia blow the lot and end up having to become a minicab driver in his 70's, I'm not sure I have the same level of faith...

Faith in the pool of neglected initiative and capacity for work reposing in older people who would traditionally be consigned to the scrap heap?

[Deleted User]

lvader wrote: »

Early retirement is looking a lot closer than it was yesterday.

I retired on the day of my 50th birthday.
This change in the annuity rip-off scam is great news.
My best-ever investment among quite a few good ones was marrying a much younger wife who has a highly-paid job.
I can thoroughly recommend the position of house husband.

System

bigadaj wrote: »

Does anyone know what will happen to a pension or more correctly a drawdown pot on death now. It would have been subject to a 55% tax charge but presumably now this will drop to no more than 40%?

Presumably, because otherwise a different rule would apply to someone who drew down their entire pot five minutes before death, and someone who left it too late.

Other interesting questions are what happens to pots passed to dependants, or pots left in trust rather than to an individual?

rpc

Triumph13 wrote: »

I wonder how long it will be before people with Public Sector DB schemes start complaining

It started yesterday afternoon.

hugheskevi wrote: »

(1) The direction of travel in govt. policy seems to be much more towards ISAs than it does pensions.

ISAs are included in all sorts of means tests perhaps?

Or Cash ISAs are understood by a lot of people while pensions aren't (even though pensions are often a better vehicle for the less financially literate)

gallygirl

Sorry if I've missed this, I haven't seen a clear answer and have only had time to read first 1/2 of thread in detail so far.

So - I take 25% tax free and possibly more, taxed at marginal rate, making sure I stay below the 40% threshold.

What happens to the rest? At present there is an annuity option and drawdown option. The annity option is still there and so is drawdown but I can't see any clear instructions on drawdown. There is also a hint (on Telegraph arcticle linked to on here, sorry, can't find it) about 'other options'.

I will have a share of 30k+ income from btl investments and a few small pensions when I get to 60. Nowhere near the 20k pension income required at the moment for drawdown.

What I'd like to know is - if I have say 70k left in the pot can I decide how much income I want to take each year (and then pay tax on it)? Ideally I'd like to empty the pension pot over a number of years and invest in ISA's to give tax free income. is there any clear guidance on income drawdown or equivalent?

Thanks.

paul5046

lvader wrote: »

Like I said all the pot will be withdrawn at a zero tax rate using the personal allowance.

If your state pension is your only other income, then that will be around 5k per year. Can you live on 10k a year.

paul5046

dunstonh wrote: »

Pensions now look more attractive than ISAs for many people. You only have to do the figures to see that.

And if your company contributes, even more so.

SailorSam

paul5046 wrote: »

If your state pension is your only other income, then that will be around 5k per year. Can you live on 10k a year.

Lots of people do.
In fact many have to live on £70pw Jsa, even less if they get santioned.