What does the Chancellors pension revolution mean for us?

atush

kidmugsy wrote: »

Antibiotic-resistant bacteria will solve that one.

As a former research scientist, I have to say this is a big scare of mine. Along with mutated animal viruses.

These two are Very likely to happen in the not so distant future

dunstonh

EdGasket wrote: »

Free pension advice .....IFA's will be selling off their Porsch's and BMW's heh heh

Who do you think will be providing that advice?

Early indications are that it will be something along the lines of another annual levy on the industry and this will fund the pot that will then pay existing financial advisers to give the face to face advice.

hugheskevi

The income of old pensioners will be a big issue in the future.

The new State Pension won't have inheritance, so when a spouse dies the State Pension income will half, as well as some or all private pension probably being lost too.

A large proportion of annuities sold in the last couple of decades have no spouse protection, nor any price escalation.

The decline of Defined Benefit pension income outside the public sector is another loss of index-linked income.

Now individuals can withdraw their pension at their own choice. Most seem to vastly underestimate their life-expectancy at age 65, so it seems unlikely they are going to hold a cushion of capital against living longer than expected.

Back in 1997, income support for pensioners (what is now Pension Credit) was tiered by age, with older pensioners being entitled to more. We might get full circle back to that sort of arrangement at some point Single-tier will provide a minimum income, but I think many will be ill-prepared for some of the income shocks they are going to face late in life.

May also be pressure on Care Home funding if older pensioners have lower incomes (which get means-tested), Might lead to some rejigging of care funding plans.

There may also be some interesting consequences for the housing market, as presumably many will want to move their DC pensions into BTL given its popularity.

atush

Proxy wrote: »

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.

I have to say I agree. From what I have seen here and on other forums like the Debt one, this will happen.

Imagine all those with a gambling addiction? Did the betting shops go up today when the annuity providers went down?

dunstonh

Planning for when to retire and when to take pension is going to be more important in future. i.e. retire before the end of the tax year and take the pension in the new tax year.

getmore4less

SallyG wrote: »

I printed out and posted the bit of the Chancellor's budget speech that most applies to me because I just couldn't believe it - all those years of people being forced to buy an annuity and GAD rates and drip feeding - what happens now if I blow the lot and then look for pension credit - surely I will be penalised .......he can't possibly really trust us with our own pensions?????
Was he on something?

What happens now if you have £100k in the bank, blow it all and ask for benifits.

Just add the pension money to the capital for deliberate deprivation of assets.

Might also means pension pots can be raided to pay for care.

atush

Planning for when to retire and when to take pension is going to be more important in future. i.e. retire before the end of the tax year and take the pension in the new tax year.

So instead of spread out in the year, everyone will retire end of march, and take pensions in mid April.

This will effect the markets, as all those investments will be liquidated at once, and labor markets where all the jobs opened up will be available then.

dunstonh

I wonder if you will be able to phase retirement fund withdrawal or it will require the whole fund in to be done in the same tax year.

wotsthat

atush wrote: »

I have to say I agree. From what I have seen here and on other forums like the Debt one, this will happen.

Imagine all those with a gambling addiction? Did the betting shops go up today when the annuity providers went down?

Personally I find it quite hard to believe that there are significant numbers of people who, despite having debt problems and/ or gambling addictions, took the time and effort to build worthwhile pension pots first.

atush

I wonder if you will be able to phase retirement fund withdrawal or it will require the whole fund in to be done in the same tax year.

It sounded like as you please so could be spread out as much as you like.

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