What does the Chancellors pension revolution mean for us?

atush

Well I hope there are going to be some sort of restrictions.

PensionTech

Conrad wrote: »

Savers with pension pots of less than £30,000 can now take this out as cash, in what is a welcome lifeline for savers with small pension pots.


But at what age, anyone know for sure? I ask because I have a smallish pot I wouldn't mind re-investing in B2L because I get an immediate high yield based on a £120k property, by only inputting 25% from my own capital.

You don't say whether you have any other pension pots - remember that the £30,000 trivial commutation limit applies to ALL your pension benefits, not just those in one pot. If you do have multiple pots that take you over the limit then you might be able to use the £10,000 "small pots" rule instead. If it's not under £10,000, you may be able to transfer sub-10k chunks to a few different personal pensions and individually commute (maximum) three of those. But that really depends on your circumstances, whether your current scheme will allow you to do that (some might not allow partial transfers), and what charges would be involved. In either case, you will need to be over 60.

Alternatively you can wait until April 2015 and take it out from age 55 - provided that it's a DC pot.

kidmugsy

mania112 wrote: »

Under an Annuity, the insurance company keeps your money when you die.

It's mainly the other annuitants who get it - and they'll pay tax on it.

hugheskevi

Taking a bit of a Devil's Advocte approach, would the restrictions distinguish between:

(i) Those never in a position to save
(ii) Those who could have saved, but failed to do so and fall back on the State
(iii) Those who saved, blew the lot and fall back on the State


It isn't obvious to me that (ii) are a more deserving group than (iii) and so shouldn't the same rules should apply to both groups?

Triumph13

For me, the most interesting thing will be to watch what new products emerge as a result of this. Most people in the accumulation phase just take the default funds and don't think about it, but if they want to go drawdown are suddenly faced with bewildering complexity.
I would expect the pensions industry to be coming up with a whole new range of products for the drawdown phase for those who don't want to think too hard about it and for these to be where most people get pushed by the free advice at retirement.
Whilst there will still be some people who enjoy picking out their platforms and funds / shares / bonds / etc / etc, I would expect a big proportion of those people who currently buy an annuity to buy an off the peg drawdown pension from someone offering limited fund choices but low costs and user friendliness. Big opportunities for some.

kidmugsy

"What does the Chancellors pension revolution mean for us?"

For a small subset of us, it'll mean withdrawing more per annum from our pension than expected, and seizing the chance to defer State Retirement Pension for a year or two, before starting it with Extra Pension as the reward. Lovely biscuits!

[Deleted User]

mania112 wrote: »

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

my question too. My sipp is small and I would like to take it all out next year

Owlman45

When I watched the annoucement I thought good news for those job hoppers (like me) with a mix of Final Salary and Personal Pension pots over 18K but as with all budgets the devil is in the detail so I think I will wait until the weekend and the number crunchers have had a chance to work out some real examples. Once again the only guarantee with pensions is that the government will change the rules. Let's hope this time it's to the consumers benefit but I won't hold my breath for 6years when I hope to retire!

nymphalisio

Under the new Pension rules will I be able to withdraw more, or all, of my money invested in a SIPP deal?

Regards

kidmugsy

nymphalisio wrote: »

Under the new Pension rules will I be able to withdraw more, or all, of my money invested in a SIPP deal?

Regards

Certainly not. No dog lives to the required age.