What does the Chancellors pension revolution mean for us?

mania112

For me, this highlights two things

1) The government wants to stay in power and have introduced vote winning legislation. Doesn't it seem odd to anyone else that there are many rules which will only apply for one year? GAD to 150%, Triviality to £30k, Stranded Pots to £10k - will all be irrelevant from 2015.

2) The government has introduced a backdoor tax again. Under an Annuity, the insurance company keeps your money when you die. In Drawdown, or if you withdraw it - it is more likely the tax man will get a bite.

mania112

The remaining unanswered question for me is if folks currently in Drawdown will be able to fully withdraw in 2015.

atush

I have only had a short time to digest this, but I can see the big problem.

Which is, that today's pension savers are more likely the people the chancellor was talking about (who saved hard for years blah blah blah) who wouldn't blow the lot.

But with auto enrollment, I can see that a lot of future pensioners (more than the Can I cash in my pension crowd today) will be the type to blow it all. And then will be looking for handouts.

I have to say, this makes me nervous. As we can see how little financial education people have.

SallyG

For trigger happy drawdowners - 150% GAD March 27th-
http://www.hmrc.gov.uk/manuals/rpsmmanual/rpsm09103570.htm
Transferring in drawdown no longer automatically triggers a review/recalculation?

Also - anything left in the drawdown pot when I die will still be taxed at 55%?
Can I revisit my PCLS tax free lump sum and take more at 20% tax??????

kidmugsy

Seabee42 wrote: »

There is already talk of bans on transfers from DB to DC pensions, especially for unfunded schemes oh boy lots of fun ahead.
.

Talk by whom?

Proxy

SallyG wrote: »

For trigger happy drawdowners - 150% GAD March 27th-
http://www.hmrc.gov.uk/manuals/rpsmmanual/rpsm09103570.htm
Transferring in drawdown no longer automatically triggers a review/recalculation?

Yes, but at the end of the day the changes to drawdown are just a stop gap to free-for-all-pensions in a year's time.

As popular as the changes are for many, the government is simply piling up problems for the future. People cannot be trusted to keep enough money back for when they're in their 80s and 90s.

kidmugsy

atush wrote: »

I have only had a short time to digest this, but I can see the big problem.

Which is, that today's pension savers are more likely the people the chancellor was talking about (who saved hard for years blah blah blah) who wouldn't blow the lot.

But with auto enrollment, I can see that a lot of future pensioners (more than the Can I cash in my pension crowd today) will be the type to blow it all. And then will be looking for handouts.

I have to say, this makes me nervous. As we can see how little financial education people have.

Not to worry, the rules will have changed again by then.

mania112

Good news for advisers.

Prudent retirees will now more than ever need professional help from an IFA. Without an insurance firm telling you what you will be paid each month, it will need an adviser to let you know what's suitable.

kidmugsy

Proxy wrote: »

As popular as the changes are for many, the government is simply piling up problems for the future. People cannot be trusted to keep enough money back for then they're in their 80s and 90s.

Antibiotic-resistant bacteria will solve that one.

Proxy

mania112 wrote: »

Good news for advisers.

Prudent retirees will now more than ever need professional help from an IFA. Without an insurance firm telling you what you will be paid each month, it will need an adviser to let you know what's suitable.

Aside from the fact there'll be free government advice instead.

And poorer retirees just won't bother.

It's the same inertia as we see in the annuity market. People know there are better options, but don't bother to seek them out.