MSE News: Budget 2014: Radical reforms to give greater access to pensions savings

Truthseeker_2

lvader wrote: »

It will allow some people to retire much earlier than they might have been otherwise, so it is a game changer.

At a steep price.

kidmugsy

Linton wrote: »

So I believe there is a real danger that people who dont understand the mathematics of life expectancy and taking money from an investment could run into great difficulties in later life.

I suspect that quite a few people who do understand the mathematics of life expectancy well enough will still take money from their investments, happy that the taxpayer will rescue them from great difficulties in later life. Judging by the history of the welfare state since it was reformed in 1945, that's the way to bet.

Truthseeker_2

kidmugsy wrote: »

I suspect that quite a few people who do understand the mathematics of life expectancy well enough will still take money from their investments, happy that the taxpayer will rescue them from great difficulties in later life. Judging by the history of the welfare state since it was reformed in 1945, that's the way to bet.

This change will benefit most those who have a mix of DB and DC private or employer pensions. You could thus eat up your DC pot and let the DB entitlements defer and grow in value. For example, draw on your DC pot at 55 to 60 and then wait until 70 or even 75 before taking up the DB pension. It's a no brainer for those who can do this.

Lindagreenacre

We are in limbo. My husband asked a company to deal with his 4 pension pots on 16 Dec. The representative was useless and did nothing for a month until we sent 2 emails and a letter of complaint to the company. Now, when another person has taken over, we have made progress and my husband has signed up for them to get the "pots" from the 4 pension companies and an insurance company to provide the pension. Everything is signed up and needs to be sorted by the deadline guarantee of next Monday, or else the insurance company will need to revalue. Since the chancellor's announcement the company sorting this all out has suspended all dealings and we are left waiting for an announcement. Meanwhile we see that the share price of Just Retirement, who is signed up to provide the pension has gone into freefall.

Glosgall

I helped my friend get an enhanced annuity a MONTH ago, now we're gutted as if she'd had the option then of access to her entire pension pot she could have used it to have paid of her outstanding mortgage off and have a few thousand savings in the bank .

:mad:

Truthseeker_2

Glosgall wrote: »

I helped my friend get an enhanced annuity a MONTH ago, now we're gutted as if she'd had the option then of access to her entire pension pot she could have used it to have paid of her outstanding mortgage off and have a few thousand savings in the bank .

:mad:

The point of a pension is not to do things like pay off the mortgage! Infact, your mortgage should be paid off by the time you retire anyway.

hugheskevi

With the new DC pension system combined with the growth of 40% tax-payers, conditions are ideal for a pension-mortgage comeback. In which case it would be very inefficient to have paid off mortgage by retirement

Glosgall

She retires next year and because of having leave work through ill health she still have a mortgage which won't be paid off before she retire. She's spent all of her savings over the past 4 years and is relying on disability benefits now , so , to have had the chance to have paid off her mortgage would have been a huge burden lifted and given her time to enjoy herself whilst she still can .

atush

warddru0455 wrote: »

Hi Truthseeker,
The idea was to withdraw the difference between my current income and the 40% tax threshold each year till the pot is depleted. Only just started looking at getting my money back and was hoping this was a game changer.!!!!

Yes, you could do this. But what/where will you put the money if you are

skeptical of Banks/Financial services being independent.

Zelazny

Glosgall wrote: »

I helped my friend get an enhanced annuity a MONTH ago, now we're gutted as if she'd had the option then of access to her entire pension pot she could have used it to have paid of her outstanding mortgage off and have a few thousand savings in the bank .

:mad:

Unless it was a smallish pot (<£30k) she'd have had to wait another year anyhow. It still might be worth looking into the policy - see if there's a cooling off period?