New Labour supporting pension changes..

WobblyDog

I'm concerned that removing the requirement for most people to buy an annuity with their DC pension pot at retirement will lead to many making bad decisions, and I say that as someone is likely to benefit from this change. Several scenarios I can think of:

- People with poor financial judgement choosing to either spend it or "invest" it unwisely. I know a couple of people with DC pensions and gambling problems, so I don't have a lot of faith in the average level of financial judgement. Also, some peoples mental capacity will be slowly declining at retirement age, possibly due to underlying health conditions. I saw this in a previously savvy relative who made progressively worse financial decisions in his sixties.

- Retirement can cause turmoil in marriages. Another reason that people might not be in the best state to make such momentous financial decisions.

- People under pressure from younger relatives (who may not always be well-meaning) to give them some of their inheritance early.

- A range of new financial scams will be targetted at people approaching retirement age.

Finally, although annuities do look like bad value, isn't that partly due to the government's QE program, rather than failings of the insurance companies?

crisp

the biggest enemy to pensioner wealth are politicians trying to fleece them of their hard earned cash via an ever increasing tax burden.

If you saved it over the decades then its yours to do as you please and you are no worse than that person that earns and spends it all on non-essentials year after year. My only concern are bankers and financial advisors misselling these people some product to invest in.

hyubh

crisp wrote: »

the biggest enemy to pensioner wealth are politicians trying to fleece them of their hard earned cash via an ever increasing tax burden.

I could have sworn personal taxation for relatively wealthy people is considerably lower now than thirty years ago...

If you saved it over the decades then its yours to do as you please and you are no worse than that person that earns and spends it all on non-essentials year after year.

But no better either...?

My only concern are bankers and financial advisors misselling these people some product to invest in.

Ah, so if it's not the devious socialists it's the greedy capitalists!

Teaandscones

dunstonh wrote: »

If you spend 5 minutes in the PPI reclaim forum you will get a very different view of people than in this section. This one tends to have more mature and responsible posters. QUOTE]

I regret not buying PPI, where else could I have got 8% return on cash? Perhaps those on the PPI board are having the last laugh

Yorksport

deejaybee wrote: »

As per title.

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

Maybe they have seen the polling ?

Pretty clueless, mainly because they get inflation proofed pensions paid for by us. They don't have any policies in this area but their natural response is always that the state knows best. Even Labour can't maintain the argument for long that it's wrong to give people a choice over how they spend their own money. Does anybody believe that Ed Balls has the competence to become Chancellor of the Exchequer?

steampowered

Yorksport wrote: »

Pretty clueless, mainly because they get inflation proofed pensions paid for by us. They don't have any policies in this area but their natural response is always that the state knows best. Even Labour can't maintain the argument for long that it's wrong to give people a choice over how they spend their own money. Does anybody believe that Ed Balls has the competence to become Chancellor of the Exchequer?

People are notorious for underestimating their own life expectancy.


We will simply end up with millions of people who run out of money and become completely reliant on the state to live. More tax income for George Osborne now, a huge social problem for a future chancellor to pick up.

Tom2023

deejaybee wrote: »

As per title.

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

Maybe they have seen the polling ?

Yes the Labour leadership have seen how popular these proposals are so they sort of support them. They say they won't vote for them in the Budget debate because they want to see the detail in the actual Bill that changes the Pension laws.

Some Labour MPs have complained that because pension contributions are tax free people should be forced to buy annuities as it wasn't all their money!

My worry about the Labour party is they have a hard-on when it comes to what they percieve as wealthy pensioners.

There is a pensions think-tank that has recommended the TFLS be restricted to £30k on the grounds that it would raise a load of tax (you know how Labour love to tax people) and only 25% of pensioners (nearly all Tory voters) would be affected.

All this instability in pension policy is very bad for pension planning. It is a pity we are not all millionaires like most MPs.

Tom2023

steampowered wrote: »

We will simply end up with millions of people who run out of money and become completely reliant on the state to live. More tax income for George Osborne now, a huge social problem for a future chancellor to pick up.

I'm pretty sure the DWP is not daft and I would imagine if you became broke and they deemed you caused yourself to be broke through deliberate deprivation you won't qualify for any means tested benefit.

Otherwise we'd all be at it.

kidmugsy

Yorksport wrote: »

Does anybody believe that Ed Balls has the competence to become Chancellor of the Exchequer?

He couldn't be worse than that nice Mr Brown.

kidmugsy

crisp wrote: »

the biggest enemy to pensioner wealth are politicians trying to fleece them of their hard earned cash via an ever increasing tax burden.

It's deeply satisfying to blame the politicians, and sometimes well merited. But in the end, the problem is that your fellow countrymen want to rob you blind; the politicians are just the means by which they intend to do so.