What does the Chancellors pension revolution mean for us?

atush

Francesca7777 wrote: »

Hello, I just want to make sure I understand this all right... I've got three private work-related pension policies... one at £23K, one at £4K and one at £11K. I turn 55 in September. With the current guidelines of there being a maximum of a £10K policy that you can cash in, presumably I could cash in the £4K one in September on my 55th birthday, and then the other two (£23K and £11K) at April 2015? Does that make sense? Thanks!

July i think?

Anyway, that totals 38K. If you withdraw it all next year, what will you live on during retirement?

If you get your SP at age 66, will you work til then and then live poor on the SP having spent the 38K? TBH, in your case I might consider Whacking as much extra as I can into a pension (does your current employer pay in?) until you actually stop working. #8K isn't really a big enough pot.

Of course, you could be sitting on an ISA pile with a mansion paid off- but I would think then you'd have a bigger pension pot.

atush

Francesca7777 wrote: »

But presumably, referring to the answer above, if you had ONE plan that was worth less than £10K, you COULD cash that in now? Even if your total of all private plans exceeds £30K?

Under rules in force Right now, you have to be 60 before yo can cash in smaller pots

Francesca7777

I should also mention that the PAS are also saying that if you take advantage of your option to cash in 100% of all your funds after April 2015, you lose your 25% tax-free lump sum opportunity, and have to pay tax at the basic rate on the entire amount!

Francesca7777

atush wrote: »

July i think?

Anyway, that totals 38K. If you withdraw it all next year, what will you live on during retirement?

If you get your SP at age 66, will you work til then and then live poor on the SP having spent the 38K? TBH, in your case I might consider Whacking as much extra as I can into a pension (does your current employer pay in?) until you actually stop working. #8K isn't really a big enough pot.

Of course, you could be sitting on an ISA pile with a mansion paid off- but I would think then you'd have a bigger pension pot.

If you must know, I have a terminal illness. Your hypothetical questions are not relevant to me.

Proxy

Francesca7777 wrote: »

If you must know, I have a terminal illness. Your hypothetical questions are not relevant to me.

If you are expecting to die in the next 12 months, you may be able to withdraw it all anyway under current rules.

fuelcrusher

So they are dropping the flexible drawdown requirement from £20,000 to £12,000 as an interim measure. Why didn't they just drop this to £0 and then no need for they wait on legislation? Wouldn't this give the same end result?

atush

Francesca7777 wrote: »

If you must know, I have a terminal illness. Your hypothetical questions are not relevant to me.

In the case of a terminal illness where your LE is estimated to be 12 months or less, you can get 100% now.

You can't blame us for assuming you are healthy if you dont' say anything? We dont read minds.

atush

fuelcrusher wrote: »

So they are dropping the flexible drawdown requirement from £20,000 to £12,000 as an interim measure. Why didn't they just drop this to £0 and then no need for they wait on legislation? Wouldn't this give the same end result?

Because that kind of change (and the free advice required) means they need time to get it thru parliament, and get the advice system set up (they have 20 mil set aside for it).

coastline

Francesca7777 wrote: »

I should also mention that the PAS are also saying that if you take advantage of your option to cash in 100% of all your funds after April 2015, you lose your 25% tax-free lump sum opportunity, and have to pay tax at the basic rate on the entire amount!

might help..

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/293743/budget_2014_greater_choice_in_pensions_explained.pdf

Francesca7777

atush wrote: »

In the case of a terminal illness where your LE is estimated to be 12 months or less, you can get 100% now.

You can't blame us for assuming you are healthy if you dont' say anything? We dont read minds.

I don't assume that anyone should know otherwise - but I find it annoying when people ask me questions about "what plans do I have in place for when I am of retirement age"... Those sorts of questions force an answer really, and also imply irresponsibility on behalf of those who do decide to take advantage of this kind of opportunity. Let's just keep the dialogue based in fact and not supposition or assumption!