New Labour supporting pension changes..

deejaybee

As per title.

But i'm sure they were very anti the new proposals immediately following the budget ?

Maybe they have seen the polling ?

OldBeanz

Their concern was that some would take their money and blow it all in Las Vegas. I think the more likely scenario is that scammers have a larger window of opportunity to steal the pensions. The number of pensioners who are scammed by builders will fall into insignificance when pension pots can be withdrawn at any time.

deejaybee

Yep cant have the plebs deciding how to spend their own money can we ?

Uncle Joe would be proud..

bigadaj

deejaybee wrote: »

Yep cant have the plebs deciding how to spend their own money can we ?

Uncle Joe would be proud..

The problem is the evidence for the majority of people is that they can't manage their own money. Levels if debt are at record levels and there are a couple of posts a day on here asking how,people can access this their pensions to either oay down debt or blow it in the short term.

It's interesting to see what the other side of these plans will be, were moving to flat rate pensions anyway and a reduction in means tested benefits will continue.

Cue threads about increased levels of poverty and more thought about the children.

Drp8713

In 25 years I have never voted, as usually it's like picking between satin white and prism white on a dulux colour chart. They are both the same.

But this time round I feel labour are so incompetent that I don't think I can trust them with the economy. Every policy they come with seems like a headline winner, but with no thought on whether it could actually work.

I'm going to break up the banks, oh thanks for wiping billions of pounds off the value of the banks that the tax payer own you cretin.

I'm going to freeze energy prices, if you do that we will have blackouts say the energy companies.

Vote against labour is all I can say

le_loup

deejaybee wrote: »

Uncle Joe would be proud..

The problem is that language like yours is the currently predominate one. Thinking people, however need only spend a few days in these forums to know the terrifying ignorance of managing finances that many - no - most people have.
The scandals of financial organisations having not the slightest problem in conning people in, for example, PPI scams shows how "ignorant" people really are. I put ignorant in quotes because I don't think people are ignorant, just in matters financially slightly complicated. Like I am completely ignorant about how electricity works.
So, because you know how manage you retirement needs, you mustn't think that everyone has, or can acquire such knowledge, any more than I will ever understand what is happening when I throw the light switch.

hugheskevi

In just the last couple of years, Enhanced Transfer Value and Pension Increase Exchanges were going to be banned by legislation, but ended with an industry voluntary code of conduct. In these exercises, individuals with Defined Benefit pensions are offered a Defined Contribution pension (of lower overall value) and a cash lump sum in exchange for their Defined Benefit pension.

There has also been an ongoing Pension Liquidation problem, whereby individuals use very questionable companies to exchange their pension to a lump sum. This usually results in a huge loss of value from fees and HMRC penalties.

No doubt some individuals involved in taking Enhanced Transfers, Pension Increase exhanges and liberating their pension were responsible about how to spend their money - I have read anecdotal reports that many of the folk liberating their pension wished to use the money to grow their own business and were fully aware of the tax losses they would incur and were viewing it as a business decision. But large numbers were not responsible.

One of the problems about retirement resources is that harm suffered due to foolish actions may well be irreparable. Earlier in life mistakes can be adjusted to by saving more, working longer, or consuming less. Once in retirement consuming less is usually the only way to react to shocks.

As long as the govt. is happy to say to those who do foolish things that it is their problem, they should have known the risks, and they must now live with the consequences (ie a lifetime of low income) then personally I've no problem with this. Sadly, I have never known a govt. that takes a hard line with pensioners. Even now, despite pensioners being significantly protected throughout the recession compared to any other group, we are launching guaranteed financial products with above market returns solely for better off pensioners as a pre-election bribe.

It isn't just the risk that pensioners blow all their money on a car, that is probably one of the smaller risks in the overall picture. If, for example, a company steps into the new financial product space which has been created to offer some sort of guaranteed income product which proves to be based on overly generous assumptions (similar to Equitable Life) I suspect the govt. of the day would have little hesitation in using taxpayers money to bail out those who lost money.

That isn't a reason not to make changes, but it (and similar risks) are reasons why you might want to deliberate over the policy, consult in detail and implement the change in a controlled manner rather than just make changes at break-neck speed and respond to the problems created as they emerge.

dunstonh

New Labour supporting pension changes..

What is this "New Labour" you speak of? I'm not sure the current leadership is anything like New Labour. More Old Labour.

The scandals of financial organisations having not the slightest problem in conning people in, for example, PPI scams shows how "ignorant" people really are. I put ignorant in quotes because I don't think people are ignorant, just in matters financially slightly complicated. Like I am completely ignorant about how electricity works.

Whilst there was certainly wrongdoing by the banks on PPI, the regulator also created a windfall situation that makes it very difficult for banks to support valid sales. The court case ruled that the regulator had the authority to force the banks to review all sales using rules that did not come in until later. So, you now get opportunistic compensation chasers playing the game. I dont think anyone comes out of PPI smelling of roses. Banks mis-sold, regulator allowed them for 20 years and consumers are putting in high volumes of fraudulent complaints to get compensation (some firms are reporting as many as many of half the complaints they get dont even have PPI). The complaints system is also open to blackmail where it is cheaper to pay out compensation of around £1500 than it is to reject a complaint that has no basis. So, this encourages fake complaints and claims companies just make this worse.

Anyway, getting back on subject, there will always be people that need protecting from themselves but for far too long, the nanny state has been taking over decisions and allowing people to avoid responsibility and that in turn lets people not bother about being responsible which creates the spiral of the state needing to take on even more responsibility which allows even more dumbing down and so on and so on. Any move to encourage responsibility has to be a good thing.

Personally, I think they should have set a minimum guaranteed income requirement like flexible drawdown. Perhaps set it at the pension credit thresholds to ensure that people who do spend their money poorly do at least have a secure income above the breadline.

Linton

dunstonh wrote: »

.........
Anyway, getting back on subject, there will always be people that need protecting from themselves but for far too long, the nanny state has been taking over decisions and allowing people to avoid responsibility and that in turn lets people not bother about being responsible which creates the spiral of the state needing to take on even more responsibility which allows even more dumbing down and so on and so on. Any move to encourage responsibility has to be a good thing.

.........

This is fine when people can learn from their mistakes and not repeat those mistakes next time. However with complete pension liberalisation as described in the consultation paper it seems that many people will be given access to amounts of money they have never had any experience of handling in the past and they will not have the opportunity to do better next time. There is no next time.

Add to this the opportunity for scammers and the irresponsibility of the media with respect to matters of personal finance I believe many people retiring in the near and medium term future with average and less than average pension provision will suffer.

Your suggestion of having some level of non State guaranteed income before full access to the funds is permitted makes a lot of sense. Perhaps it would be possible for this level to be reduced over time as the population as a whole becomes more aware of financial matters and the industry has had the chance to devise and advertise packaged solutions using the new freedoms.

richbeth

le_loup wrote: »

The problem is that language like yours is the currently predominate one. Thinking people, however need only spend a few days in these forums to know the terrifying ignorance of managing finances that many - no - most people have.

I would say that the number of people asking naive questions is fairly low and what we do see is that with constructive advice from others on the forum people can quickly pick up the information they need. For every "how can I get my hands on my pension" there are many more "am I saving enough/what's the best thing to do ?".

le_loup wrote: »

So, because you know how manage you retirement needs, you mustn't think that everyone has, or can acquire such knowledge, any more than I will ever understand what is happening when I throw the light switch.

You can learn what happens when you use a light switch
http://science.howstuffworks.com/electricity.htm
and others can learn about financial matters The changes being proposed will actually simplify the system making it easier to understand.

I also have nagging doubts about this but am sure it will evolve over time and at least it is working on the basis that we are responsible adults which the vast majority of people are. The problem with the nanny state approach is that it becomes a self fulfilling prophecy, people expect to be looked after so don't feel they need to take responsibility so then need to be looked after etc etc

R

OldBeanz

I worked in a bank in 1973 and remember the angst of the manager (when managers were managers) who had been told to flog bank investments rather than anything better. My future wife was sold PPI in 1985 despite having been a civil servant of 7 years living at home, so the banks have been untrustworthy for many years.
It will be those like my in-laws who bought an expensive alarm system in an area where burglaries were low and they spent most of the time at home, the first indication that my f-in-l was losing "it".
People will always abuse the benefits system which can be refined. It is the infirm who will have their pensions stolen by family, neighbours and rogues.
An elderly aunt had an account rifled by an employee and her jewellery was pilfered without any break-in when a council employee had a key. Employees of both organisations thought she would not last long and stole from her. If she had a cashable pension then that would have been prone to similar attacks.