What does the Chancellors pension revolution mean for us?

Proxy

Gorgeous_George wrote: »

The change is quite interesting. Like the rest of the budget, it benefits the rich who will have the larger pension pots.


However, compulsory annuities were one of the reasons that I would never save in a pension fund. The other is that any tax benefits are more than wiped out by the fees.


At least with the capital one would be able to buy a house or houses to let out (possibly to family members). This could turn £100K into an income of £600 per month that would rise by inflation and the capital is as safe as houses. Annuities couldn't match that.


GG

All investments have fees. Investing in share portfolios outside a pension has fees, but it doesn't have the tax benefit or employer contribution.

Buy to let has some quite substantial and less predictable fees than a pension. And significantly more risks than an annuity, in void periods, willful damage and property crashes (yes, the latter can actually happen)

A pension isn't a panacea but i don't agree with that argument.

gadgetmind

DiggerUK wrote: »

Seems that making up figures comes for free as well.
..._

All accurate figures for our wonderfully complicated tax bands with a sprinkling of NI on top.

Please feel free to correct me if I've got any wrong.

zagfles

Gorgeous_George wrote: »

The change is quite interesting. Like the rest of the budget, it benefits the rich who will have the larger pension pots.

Rubbish, the "rich" could already use flexible drawdown.

However, compulsory annuities were one of the reasons that I would never save in a pension fund. The other is that any tax benefits are more than wiped out by the fees.

Annuities are not compulsory and haven't been for several years. Capped drawdown is an option for everyone, and the fees are low enough if you shop around.

At least with the capital one would be able to buy a house or houses to let out (possibly to family members). This could turn £100K into an income of £600 per month that would rise by inflation and the capital is as safe as houses. Annuities couldn't match that.

GG

Yeah right. An annuity won't ask you to fix the boiler or the roof. An annuity won't stop paying you when you have a rental void. You won't lose 6 months rent and have expensive legal fees and a wrecked house if you get a dodgy tenant.

A BTL as a pension is far riskier than most other forms of investment.

RobStaffs

Overall I think its a postive move. Particulary for those with a decent pension but in their mid fifties who want to live a bit while they are at a relatively young age. I did an exercise recently on how much money I need to survive with allowances for a little bit of luxury. Its surprisinly little.

RobStaffs

I am 50 and was wondering if it is advisable to put additional contributions into your pension scheme say for the next five years to take advantage of reduced NI in a payment sacrafice scheme and get the deferred tax benefit?

Credit-Crunched

zagfles wrote: »

Rubbish, the "rich" could already use flexible drawdown. Annuities are not compulsory and haven't been for several years. Capped drawdown is an option for everyone, and the fees are low enough if you shop around.

Yeah right. An annuity won't ask you to fix the boiler or the roof. An annuity won't stop paying you when you have a rental void. You won't lose 6 months rent and have expensive legal fees and a wrecked house if you get a dodgy tenant.

A BTL as a pension is far riskier than most other forms of investment.

Also, its almost impossible to imagine an asset such as a house falling 35% in value over a 12 month:rotfl: period

lvader

Credit-Crunched wrote: »

Also, its almost impossible to imagine an asset such as a house falling 35% in value over a 12 month:rotfl: period

You mean like they did in Ireland? or even in the UK is you value property in Euros or USD?

chucknorris

Triumph13 wrote: »

Here's a deeply cynical thought. I wonder how long it will be before people with Public Sector DB schemes start complaining that it isn't fair that private sector people with DC schemes can take their money however they like, but they are stuck with having to take a regular income? (probably already happening) But will the govt encourage those complaints before 'bowing to popular opinion' and introducing DC schemes to the public sector? Now that would be sneaky.

People in public sector pension schemes are free to also invest in DC schemes. I am in the TPS but I also plan to have about a £350k sipp if I work to the state pension age.

atush

kittie wrote: »

stop worrying about other people, you are definitely being patronising and you need to butt out of their business

If you dont' want me in your business, don't post?

RobStaffs

The next Money Box programme on Radio 4 is dedicated to Pensions and the impact of the budget.