If Pension Freedom Had Never Happened?

westv

I noticed today that annuity rates appear to have gone south again recently. It got me wondering as to where we all might be now in our plans if the 2015 changes had never ocçured.

EdSwippet

westv wrote: »

I noticed today that annuity rates appear to have gone south again recently. It got me wondering as to where we all might be now in our plans if the 2015 changes had never ocçured.

Before 2015 and flexi-access there was 'capped drawdown'. Although more restrictive than flexi-access, it specifically did not involve an annuity purchase.

https://www.moneyadviceservice.org.uk/en/articles/capped-drawdown#how-it-works

westv

EdSwippet wrote: »

Before 2015 and flexi-access there was 'capped drawdown'. Although more restrictive than flexi-access, it specifically did not involve an annuity purchase.

https://www.moneyadviceservice.org.uk/en/articles/capped-drawdown#how-it-works

Didn't it also require a minimum level of guaranteed income from other sources?

drumtochty

It has allowed people to store income for a few years that they would pay 40% or higher tax on and take it out at 20% tax or lower when they are earning less in retirement and take 25% tax free at short notice.



It has also allowed early retirees to take a larger pension from say 57 and then reduce that at State pension age as the state pension comes in.

SonOf

westv wrote: »

Didn't it also require a minimum level of guaranteed income from other sources?

capped drawdown didn't but flexible drawdown did.

Silvertabby

When the freedoms were announced, there were many comments on these and other financial boards from people who intended to live the high life from age 55 or so, then latch on to the public purse in retirement.

It's too early to say if their plans will work. I know DWP issued a 'deprivation of pension assets' leaflet, which stated that those who squandered their pension pots will still be assumed to have the money when applying for means tested State benefits - but I don't know how that will work in practice.

Sea_Shell

We would have maxed out our ISA's rather than prioritise pensions, if we'd have not been able to access at 55.

Thrugelmir

westv wrote: »

I noticed today that annuity rates appear to have gone south again recently. It got me wondering as to where we all might be now in our plans if the 2015 changes had never ocçured.

I assume that you aren't invested 100% in equities and do hold bonds as part of your portfolio. In which case longer term you may well experience some drag in performance.

westv

Thrugelmir wrote: »

I assume that you aren't invested 100% in equities and do hold bonds as part of your portfolio. In which case longer term you may well experience some drag in performance.

Ermmm... thanks for that one but it doesn't really relate to the question.

Thrugelmir

westv wrote: »

Ermmm... thanks for that one but it doesn't really relate to the question.

Everything happens for a reason.;)

What data are you comparing to assess going "south"? I assume rates must be now extremely low.

pensionpawn

I for one will happily kiss Osborne's bot for the pension reforms. I was getting seriously depressed by my annuity forecasts even though they were based on a reasonable six figure pot. It's a game changer for me.