POLL. How will you use new pension freedoms?

DiggerUK

An article from The Daily Telegraph asks just that question, and contains the poll I refer to in the title of this thread.

Contrary to all those who squealed very loudly that old age squanderbugs would waste it all on a Lamborghini, it shows that not to be the case.
So, I think it best to sell your shares in makers of fast cars.
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greenglide

And it really sounds representative of the real world doesn't it?

Most savers said they would either buy an annuity with a small portion of the fund

To "most" savers the income from an annuity purchased from "a small portion of the fund" would be a few pounds per year.

Since the average pension pot is around £20,000 to £30,000 this clearly makes no sense.

Maybe Hymans Robertson only asked their customers and these were not "normal" people?

atush

The question and poll are flawed if they are based only on the demographic of the telegraph readership. as this demographic might be either more educated (ie it is a broadsheet w/o topless women) and/or might have larger pots as they might have higher paying jobs overall.

I personally DO see the squandering by the majority of those with smaller average size pots like above, as they will not have enough to buy any sort of decent sized annuity nor any Drawdown pension.

They will draw their 20-30K, and pay tax on it (as some will grab it at 55 while still working) and then spend it on whatever- won't be enough for a Lambo but might buy a second hand audi or new ford after tax. Or holidays, or debt, or whatever.

What wont happen is that any of the 20-30K will be left when they actually retire. So maybe they wont be abl to afford to?

This will change over the decades once those auto-enrolled now retire, as they will have saved into pensions over a longer period than those with 20K pots now did.

gadgetmind

atush wrote: »

The question and poll are flawed if they are based only on the demographic of the telegraph readership. as this demographic might be either more educated

Maybe, but 60% are saying "Leave the money invested and make withdrawals as needed", which isn't exactly a marginal result.

DiggerUK

It seems that the principle of paying the pension pot back to those that paid for it, is still causing a lot of bother for some.

When a pension contract was first entered in to, it would have been impossible to really know what you would need that money for in retirement, or even when you might need it. The time has come to accept that the pension world has had a major and irreversible change.

Perhaps a more responsible debate can now be started on these pages, that begins to address the main issue of how retirement is to be funded in the decades to come. More of the same will not do, this serious question must be confronted.

A rounded off examination of the poll results, shows that 75% would go for re investing, or leaving it invested. 5% would put it towards property as BTL, or by clearing the motgage. 14% would put some or all in annuities. The remaining 6% would include squanderbugs alongside the terminally ill.
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atush

People have always known what a pension was needed for.

Income in retirement.

atush

gadgetmind wrote: »

Maybe, but 60% are saying "Leave the money invested and make withdrawals as needed", which isn't exactly a marginal result.

But gadget, will there be a plethora of DD pensions availabe for those iwth the average pot of say 20k?

I looked for one a few years back for a pot of 30K (an old WP pension we had) and had a hard time.

DiggerUK

DiggerUK wrote: »

........When a pension contract was first entered in to, it would have been impossible to really know what you would need that money for in retirement, or even when you might need it. ........
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atush wrote: »

People have always known what a pension was needed for.Income in retirement.

You have answered your own question, could you come back with a response to the point I made.

zagfles

atush wrote: »

But gadget, will there be a plethora of DD pensions availabe for those iwth the average pot of say 20k?

I looked for one a few years back for a pot of 30K (an old WP pension we had) and had a hard time.

You couldn't have looked very hard. HL are (and were) good value for that sort of pot with capped drawdown.

Sophie-1

Even with new rules it will still be difficult, at the moment, to get a decent and secure income.

DiggerUK

Decent and secure incomes in retirement were the norm.
If private pensions don't fill the gap left by defined benefit/final salary schemes closing, then is it not time for the state to take on that responsibilty through such institutions as National Savings, or a new body.
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