Pension Rule Changes

Depth_Charge

Hi

Pension Rule Changes

Posted this on other forum sections, but may also relevant here.

http://www.adviceguide.org.uk/england/news/whats_new_jul14_changes_to_pensions.htm

Not much around on this yet, but it will come to the forefront sooner or later that is a certainty

This could become an important area of discussion as far as debt solutions are concerned (including formal solutions)

The cold calls / flyer letters are already going out for 'advice' on pensions / loans / debt etc.

People where this applies (or potentially) need to be very aware and 'independently' advised as it could be the next one so to speak

Comments / information anyone

DC

sourcrates

Yes, this was announced a little while ago, for me its a very good thing, I have 7 years until I'm 55, I have an old personal pension I started in the early 1980`s, with around 25 grand in it.
It works out a very paltry sum as an annuity under the old rules, but, under the new rules, I will be able to withdraw the lot as a cash sum (25% tax free, the rest is taxable) to do with as I wish :T !!!!!


So yes, I`m quiet happy about it, cant see a downside myself.

Muhren

Whilst the choice for most people will proabably be a good thing I personally think there could be some horrible consequences from this change for people who aren't good at managing their money.

sourcrates

Muhren wrote: »

Whilst the choice for most people will proabably be a good thing I personally think there could be some horrible consequences from this change for people who aren't good at managing their money.

Yes that could be a problem, but non of us know how long we have in retirement, it could be 10 years, it could be 30, its all a bit of a gamble, but its only personal pensions that will be effected, the state pension, as small as it is, will not be affected by this, so as long as you qualify for that, its always there as a back up.


It depends what people choose to do with the money, I own my own home outright, so don't have any worries there, myself I am going to go a little mad :beer: and enjoy it, of course I wont blow it all, I will save some, and I will still be contributing to a new workplace pension for around 20 years, so although I may not be able to buy a new Ferrari with it, I may be able to afford the wheels lol :rotfl:!!

Depth_Charge

Hi

Some interesting comments so far

A very interesting and food for thought blog link on the same subject below from the Debt Camel site as posted earlier by longtermplanner on the IVA forum

http://debtcamel.co.uk/2015-pension-changes-a-new-option-for-paying-off-debts/

DC

Mort

sourcrates wrote: »

the state pension, as small as it is, will not be affected by this, so as long as you qualify for that, its always there as a back up.

It wouldn't surprise me if the next government were to a number on the state pension. The current government has been banging on about the cost of the out of work benefits throughout their term. The cost of pensioner benefits is much greater and the state pension might as well be a ponzi scheme.

ML420cdi

Is there any law forcing pension companies to offer the option of complete withdrawal or will it be down to the individual pension companies to decide if they will let people make the withdrawal and maybe figure in some financial penalty for allowing you to?

Brightspark87

Personally, as an IFA I worry that people will not be getting correct independent financial advice, and therefore making decisions they may regret. I completely understand that people do not want to keep paying debt with their pensions sitting there, but its a scary thought that the state benefits are not kicking in until 65+ and pensions can be accessed at 55.
I just want everyone to be able to make informed choices, rather than cold calling companies making a quick few pounds.

Depth_Charge

Brightspark87 wrote: »

Personally, as an IFA I worry that people will not be getting correct independent financial advice, and therefore making decisions they may regret. I completely understand that people do not want to keep paying debt with their pensions sitting there, but its a scary thought that the state benefits are not kicking in until 65+ and pensions can be accessed at 55.
I just want everyone to be able to make informed choices, rather than cold calling companies making a quick few pounds.

Hi

Some good points in there

Article below that shows the potential scale of the numbers & money involved.

http://www.telegraph.co.uk/finance/personalfinance/pensions/11017795/4bn-tax-bonanza-as-650000-cash-in-pensions.html

With these huge figures potentially involved you can bet the usual 'we can help' flyers & calls will be dropping through the letter boxes and travelling down the wires (I know as have recently received one:)

Big subject this, the potential scale & implications of which is only just being acknowledged in certain quarters and that just might be the problem as things get into gear.

My take

DC