'Cancelling the tax on unused pension pots could be a disaster...' blog discussion

Former_MSE_Helen Posts: 2,382 Forumite
This is the discussion to link on the back of Martin's blog. Please read the blog first, as this discussion follows it.

Please click 'post reply' to discuss below.


  • gik
    gik Posts: 1,130 Forumite
    Link isn't working:-

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  • Thanks gik, this has now been fixed.
  • I find the whole idea of pensions overwhelming at times, I just don't know where to go for the best impartial advice.

    I actually have 2 pensions (well 3 actually, but one is a very small pension from my time in the armed forces many years ago, so no longer contribute to that) that I pay into.

    One is a personal private pension that I have had for about 20yrs, it's not very large (last estimate was approx 5K per year) and the second is a works pension that I contribute 5% of my salary too, I have only been with this company about 3 years, but my thinking behind it was that as they will match my contributions, and I'm in my mid 50's, that if I stay with them till I retire, the pension pot accrued will probably match my personal pension.

    But am i doing it right, should I try to merge the 2 pensions, should I look at changing my private pension, I just don't know where to look, now with all the talk of tax changes, changes to annuities, changes to state pension am I wasting my cash or am I doing the right thing.

    There seems to be a lot of people telling us to take a pension for our later life, but no-one seems to be able to give impartial advise, they all seem to be trying to sell their product, what is really concerning me is that I am coming into an inheritance of approx £30+K and I am being told that I should forget pensions and put it into property as that will give me a better return than any pension fund, I have never had this amount of money in my life, I live in a council house, I work approx 60hrs a week and I try to do my best for my family.

    I don't want my family to have to look after me in my old age, hence I took out the pensions, but they seem to be wholly inadequate in this day and age and ever changing financial climates, I thought I was doing the best thing for my family and I by taking out a pension, but all the talk of pension changes just makes me more concerned.

    It appears I have had a rant, my sincerest apologies, seems like I needed to get that out :o

    Andy H
  • Cyberman60
    Cyberman60 Posts: 2,472
    Hung up my suit!
    I would have though that Labour removing dividend tax credits on pension investments in 1997 was more of a disaster as it ruined final salary schemes, most of which have now closed !!! We really need to get disasters into perspective..... :rotfl:
  • Martin's concern is pretty nannying. The state should continue to steal a disproportionate amount in tax because some people might deprive themselves in order to leave more to their kids?? Their choice... The changes have been all over the news, so it can't be claimed it's not an informed choice.

    That said, I thought I was pretty pension-savvy but the 55% tax-take on unused funds was news to me. I assumed it would roll to my estate and be taxed at whatever IHT rate was in force.
  • BTW Heywall - one big advantage of pension investment is that it is untaxed on the way in. Your inheritance should not be taxable income, so putting it into your pensions has no benefit over other investments. Putting it toward buying your council house might well be the best thing you can do with it, but you need to do your homework: can you get a mortgage, will the repayments be less than your rent, will your property appreciate in value. Outside of the London area, property seems good value right now if you can wait for the long-term return...
  • Do not worry Martin, as soon as the election is over we will soon see a lot of "protections" that will suddenly come into place so that ordinary people will land up very restricted in using these wonderful new options.

    Or there will be nasty kickers associated with taking control of our personal pension, like having it count as capital you hold if you need to claim certain benefits etc. When currently it's protected.
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