What does the Chancellors pension revolution mean for us?

Linton

BML wrote: »

I am close to 80 years of age and took out an AVC 20 years ago before I really understood what they were. It was a waste of time because I was made redundant three years later at the age of 57 and the rules then meant that I could neither continue to put money into it, draw the money I had put into it out or do anything else with it.
I enjoyed refusing to cash it in and annoying the company the AVC is with but they milked it with their charges and commission.
If I am correct in believing that the budget has introduced the right to take that money out of the AVC then I will do so because my pensions are enough to live on.

I think it will be dependent on the scheme rules as presumably it could be linked to a Defined Benefit pension, so it may be worth checking with the scheme administrators. If you are allowed to, and the total value of the pension is less than £10K (the budget increased this from £2K) you could use the "stranded pots" option to take the cash (after tax). You can only free up a maximum of 3 stranded pots.

wannabe_credit_free

Hubby has 3 private pension pots. One is already in a unwanted annuity. The others are of considerable worth and we shall be taking the full pot to re invest, subject to advisement, with an impartial financial advisor. Annuities give a poor return. Thanks George..:beer::j

gadgetmind

atush wrote: »

but will people do it? I see them withdrawing 100K all in one go and paying HRT

I've just updated my spreadsheet to allow for Mrs Gadget withdrawing her personal allowance each year and me doing the same plus my full basic rate band. She should be able to get everything out in 6-7 years and thereby avoid all drawdown fees. I'll still have SIPP funds at SP age but diminished enough that even with SP I won't be in HR tax.

Of course, the extra we withdraw over our needs will be invested into NISAs etc.

Option 2 is to sod off somewhere that taxes pension income rather less (flat 5% in Cyprus), grab the lot, enjoy the Mediterranean for a few years (Cyprus just as tax base) and have option of returning to blighty after five years.

atush

Francesca7777 wrote: »

Stop worrying about people - it's just patronising. How do you know what someone has managed to save by the time they are 55? They may have loads of equity in a home, they may be self-employed and still earning quite comfortably, they may be quite financially secure and just want to release these "assets" to help their children... Or the may, for whatever reason, KNOW that they will not be around for more than another couple of years... Who knows? UNLESS someone is actually coming to you for financial advice, try and just stick to answering their questions factually.

Worry about people is empathy- I have it I guess you don't. It isn't patronizing.

And I covered the having savings and a paid up mtg free mansion earlier in a reply to you (so you wouldn't get mad if that was the case for you). I guess that was a waste of time.

If people dont' say their 38K pot is all they have, or if they dont' say they are terminally ill, then they won't get the best out of us here- as I said we dont read minds.

But all facts are pertinent to anyone's situation. If you want the best info, give us all the facts.

In yours, did you know the terminally ill could access 100% of their pension funds? Did you know about enhanced annuities?

lamb1102

wannabe_credit_free wrote: »

Hubby has 3 private pension pots. One is already in a unwanted annuity. The others are of considerable worth and we shall be taking the full pot to re invest, subject to advisement, with an impartial financial advisor. Annuities give a poor return. Thanks George..:beer::j

Watch out for a big tax bill if you go over the 40% threshold in one year.

atush

gadgetmind wrote: »

I've just updated my spreadsheet to allow for Mrs Gadget withdrawing her personal allowance each year and me doing the same plus my full basic rate band. She should be able to get everything out in 6-7 years and thereby avoid all drawdown fees. I'll still have SIPP funds at SP age but diminished enough that even with SP I won't be in HR tax.

Of course, the extra we withdraw over our needs will be invested into NISAs etc.

Option 2 is to sod off somewhere that taxes pension income rather less (flat 5% in Cyprus), grab the lot, enjoy the Mediterranean for a few years (Cyprus just as tax base) and have option of returning to blighty after five years.

you must have been rubbing your hands in glee yesterday Gadget lol. All those companies spent all thte time dribbling out their post RDR charges and now they have to come up with something new for this.

Interesting days ahead.

gadgetmind

DiggerUK wrote: »

With the added advantage that you have total control of your savings

And the teeny added disadvantage that you have to pay tax at 22%/42%/62%/42%/47% on the money before putting it into said ISA.

Personally, I'm rather glad that I've always ignored the pensions ignorati and that wife and I have healthy DC sums we can utilise in a few years.

gadgetmind

atush wrote: »

you must have been rubbing your hands in glee yesterday Gadget lol.

I was actually sitting in the Spanish sun enjoying Sangria, but there was also the odd smile flicking across my face from time to time.

Then I started hitting the spreadsheets, and don't seem to have made too big a hash of them given my blood alcohol content!

mhcannes

I would be interested to know views on whether these new rules would apply to a Contracted Out personal pension?

Ie a personal pension that has been purely funded from contributions that would have otherwise gone to SRPSS?

atush

gadgetmind wrote: »

I was actually sitting in the Spanish sun enjoying Sangria, but there was also the odd smile flicking across my face from time to time.

Then I started hitting the spreadsheets, and don't seem to have made too big a hash of them given my blood alcohol content!

LOL. I was doing that in Cannes a few weekends ago.

Enjoy your sangria Gadget (and I can see your wee smile from here). You've earned it.

Is Mrs Gadget as excited as you are?