Tax free lump sum and multiple pensions?

Asghar

dunstonh wrote: »

Interest rates will have no impact on that decision as you can still buy an annuity. Indeed, I arranged one last week. Annuities are not dead.

Plus, the legislation raises a lot of money for the treasury as well as being extremely popular. But in reality, it only expanded options a little compared to what already existed. Drawdown had been available for over a decade before. It just moved from being something for large pots to something for everyone.

I thought the current historically low interest rates since 2008 had some sway on the decision. Or at least was a factor because people were getting poor annunity rates for their pension pots than before the financial crisis and ending up with less income in retirement. So the goverment let people have access to all their money

I think the yearly estimated income with an annuity on my main pension pot in 2007 is still higher than my latest statement from this year. Even though the pot is over twice the size. Thats without shopping around.

I forgot about the tax benefit for the governent though. There must be a lot of people paying tax when accessing the other 75%.

dunstonh

I thought the current historically low interest rates since 2008 had some sway on the decision.

The system was flawed. You could have £100k in an ISA, unwrapped investments or investment bond and draw from it as many have done for decade after decade. Yet put the same amount in a pension and suddenly people couldnt be trusted.

Drawdown was increasing year on year before the 2015 changes. However, it was viewed an option of the wealthy. Interest rates may have sped up the change but it wont be a reason for it being reversed. Remember that the 2015 changes also changed legislation on annuities themselves and allowed greater options within an annuity.

I think the yearly estimated income with an annuity on my main pension pot in 2007 is still higher than my latest statement from this year. Even though the pot is over twice the size. That's without shopping around.

Is that using real annuity rates of the statement figures? Annuity rates are not 50% of what they were in 2007.

I forgot about the tax benefit for the governent though. There must be a lot of people paying tax when accessing the other 75%.

It's not just the tax on access. It is the money spent within the economy. That is the big win with the changes. However, there is also the inheritance of pension funds to future generations which are going to have a long term benefit.