Chances of drawdown option being withdrawn by a future government?

martinsurrey

redux wrote: »

That would be a little odd, considering that the Labour government made 10 or 12 increases, and then George Osborne froze out any increases for longer than any period since 1945.

I wonder how many people would have predicted that 20 years ago.

Blair/Brown are NOT Corbyn!

AnotherJoe

Thrugelmir wrote: »

Rises to 57 in 2028.

Got a source for that? I haven't seen that announced and wouldn't it need legislation, something the government probably has enough of at the moment?

Malthusian

AnotherJoe wrote: »

Got a source for that? I haven't seen that announced and wouldn't it need legislation, something the government probably has enough of at the moment?

It was announced in the 2014 Budget. It needs legislation but the government has another 11 years in which to do the paperwork. There is no indication that it will change its mind.

System

Triumph13 wrote: »

I'd say there is a very high chance of a future labour govt taking away the complete inheritance tax exemption.

Pensions are usually held in trust by the trustees of the pension provider. Changing the law to add these to personal estates would have major and possibly unforeseen consequences. For a start any decent pension would exceed the Nil Rate Band, so anyone with a house and a pension would come into the Inheritance Tax bracket.

Also if pensions cease to be held in trust then they might become liable for ordinary personal debts.

AnotherJoe

Malthusian wrote: »

It was announced in the 2014 Budget. It needs legislation but the government has another 11 years in which to do the paperwork. There is no indication that it will change its mind.

Changing its mind is somewhat of an irrelevance when there is not much indication it will be in power by the end of this year let alone 2028!

Plus, the shorter time there is to go, the harder (read 'impossible') it will be to pass such legislation. 10 years seems to be the acknowledged lead time minimum, no one wants another womens pensions fiasco, so they have 1 year not 11. And i reckon the current government has got other things to worry about this year than legislation that takes effect in 2028 and could easily be voted down just to give the government a bloody nose on principle.

IanSt

Clifford_Pope wrote: »

For a start any decent pension would exceed the Nil Rate Band, so anyone with a house and a pension would come into the Inheritance Tax bracket.

I'm not so sure that the fact that people with a 'lot' of assets would be hit by inheritance tax is a reason why inheritance tax would not be levied.

I can see that there may be some mitigation to allow a pension to continue providing for a partner and/or dependents under a certain age, but given that the average pension pot according to Aegon is supposedly only about £50,000 and that db type pensions wouldn't be brought into this, then I'm not so sure that this won't be done at some time should a future government want to raise some extra funds at what could be little political damage.

If the typical government employee was in dc type pensions then I'd agree that pensions would be safe from inheritance tax, but realistically I can't see a government ever stopping db pensions, at least not whilst they can print more money or just find more taxes to pay for them.

robin61

WobblyDog wrote: »

I'm a bit worried that a future government might withdraw the drawdown option before I retire, and force me to buy an annuity which my non-dependent relatives would not benefit from after I die.

What do people think are the chances of that happening?

It's crossed my mind as have possible changes to the pension being outside of inheritance tax. I try not to let these worries stop me from making sure I've got a decent pension because if I did there is a high possibility in a few years time I will be thinking I wish I had invested while I had the chance.

mikeeboy

If there are millions of pensioners in poverty because they've run out of money a future government may decide to pull it?

Unlikely to happen before you retire though.

redux

martinsurrey wrote: »

Blair/Brown are NOT Corbyn!

So what? Smearing Corbyn doesn't negate several changes that have already happened in the last few years, restrictions on pensions, dividends and so on.

Better to deal with what actually happens, rather than take over-elaborate precautions too far in advance for things which may never.