If you're EVER going to buy a house, you'd better do it before April - here's why.

ukcarper

princeofpounds wrote: »

That's not the same thing as the average pension pot of someone at or close to retirement.

That is at retirement according to association of British insurers

chewmylegoff

Retirees have always been able to draw down a tax free lump sum of 25% of their pension pot. A relatively small number of pensioners who have sufficient funds in the right sort of wrapper to be able to take out another £40-odd-k at basic rate tax is hardly going to result in house prices suddenly doubling.

chucknorris

chewmylegoff wrote: »

Retirees have always been able to draw down a tax free lump sum of 25% of their pension pot. A relatively small number of pensioners who have sufficient funds in the right sort of wrapper to be able to take out another £40-odd-k at basic rate tax is hardly going to result in house prices suddenly doubling.

I agree, I'll settle for it just supporting modest price rises either matching or marginally beating inflation.

IveSeenTheLight

mystic_trev wrote: »

Quite right - I was going to say the same. Many would end up paying higher rate tax to buy the property, and the beneficiaries pay Inheritance Tax on the proceeds when the Pensioner dies.Bit of a non story.

I understand that 25% of the fund could be drawn down tax free.

mystic_trev

IveSeenTheLight wrote: »

I understand that 25% of the fund could be drawn down tax free.

Yes, but that's always been the case, and I'm sure many have used that 'lump sum' to invest in Property.

ukcarper

chucknorris wrote: »

That's not much.

True but it doesn't surprise me.

princeofpounds

That is at retirement according to association of British insurers

OK thanks for clarification, do they include defined benefit equivalents as well?

ukcarper

princeofpounds wrote: »

OK thanks for clarification, do they include defined benefit equivalents as well?

I'm not sure but probably not I think it's pot used to buy annuity the figure is mean median is nearer £20k. Personally I'm not surprised I would imagine the figure for people here would be a lot higher but I don't believe they are typical of the majority of the country.

PasturesNew

I think I read somewhere that for most people there won't actually be a lot in the pot.

It's like most things - a few have a lot; the majority have little.

buglawton

IveSeenTheLight wrote: »

I understand that 25% of the fund could be drawn down tax free.

The first 25% can.
So if you draw £100 the first £25 is tax free and the remainder is at your current marginal income tax rates.

Scenario: A 40% income taxpayer decides to draw £20k to buy a new car.
That's £6000 tax. Then he goes to the car showroom and pays another 20% on the £14000 ticket price of the car, that's £2800.

£8800 tax, or 44% gone to the exchequer.
It's a scam worthy of Wonga!