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

Glosgall

Zelazny wrote: »

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?

It's £88K , I think there's another 30 day cooling off period been added because of yesterday's budget ., will double check that though . What would any other options be if she would need to wait until next year ?

atush

armour wrote: »

I think this is the best budget news ever.
Why do some people think it's NOT OK for people to have full access to their pension savings.
Annuity rates have been a scandal for far too long!

Personally I dont' think there is any class distinction that some should not be able to access their own full pots and others not.

But I see here day in/out (not just this week) some very intelligent and educated people don't seem to understand how much a DB pension is worth. And I see others who have small pots and want to cash them in and yet have no other provision.

So I worry about these people.

Not because I think I am better, I just dont' like to see people be worse off than they could be. I also worry about this grand experiment in non nanny state failing (which is absurd a bit because I didnt' think I believed in the nanny state).

I worry a bit, that taxpayers may have to pay the cost. Mainly, I guess I am a worrier.

mania112

Truthseeker wrote: »

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.

But if it's not, paying off the mortgage is a great idea.

mania112

All those saying 'I just bought an Annuity'

Annuity sales have a 30 day cooling off period

atush

Some apprently are being extended to 60 days I heard.

Glosgall

Have rung LV and been told we're out of time as the 30 day cool off period applies from the date we applied and not the date it was signed and sealed !

Zelazny

Glosgall wrote: »

It's £88K , I think there's another 30 day cooling off period been added because of yesterday's budget ., will double check that though . What would any other options be if she would need to wait until next year ?

If she is not within the cooling off period, then it's too late and nothing can be done.

If she is within the cooling off period, then she could cancel the plan, pay back any money she has received and have the "pot" back. If she wanted to cash this in completely, she'd then have to wait until April 2015 (assuming that they do get all the legislation passed as planned). In the meantime, this pension pot would not provide any income - so may need to look at whether she can get by without the pension?

In April 2015, she would be able to take 25% tax free, and then the rest of the pot would be taxed as normal income. So a pot of 88k could break down as:

22k tax free

then either 66k all at once (giving rise to approx 16k tax assuming no other income)
or
take 33k a year for two years (giving rise to 4.7k tax each year, assuming no other income)
or
take 10.5k for 6 years and have a little left over (no tax - assuming this is the only source of income)
etc.

Zelazny

Glosgall wrote: »

Have rung LV and been told we're out of time as the 30 day cool off period applies from the date we applied and not the date it was signed and sealed !

That sounds odd. How long between application and finalisation? I guess more importantly would be when did they start paying?

I'd have a look at the paperwork that was sent - there should be some proper details of what the cooling off period is, when it starts and how to use it.

editted to add: Looks like they might be correct. A check on the web says: "You should have 30 days to change your mind from when your instruction to proceed was validly accepted by the annuity provider. Actual practice will vary from company to company on what the start date trigger is." I'd definitely check the paperwork.

Glosgall

First monthly payment is due next Monday March 24th . ........ they received the money on Feb, 24th . Still seems wrong that they count the days from when you apply and not when it's accepted .

chubster

I have a free standing AVC with a small amount of money invested, does anyone know if the same rules apply i.e. would I be able to withdraw the whole amount when I am 55?