Giving us the freedom to choose how we take our personal pension benefits is commendable.
The proposed changes will make pension saving more attractive for most. Gone are the restrictions that put off many. No need to buy an annuity, no excessive tax penalties.
Personal pension savers can be sure that every penny saved will be available to you and your families.
That’s the way it should be. We are to be treated as grownups. Finally.
There will be consequences of course. Some good, some bad, some ugly. Here are a few that immediately sprung to our minds.
THE GOOD:
- You can shape your retirement income to better suit you. Flexibility and choice are always better than rules and restrictions.
- You are now free of the so called “pension liberation” predators. They have caused untold grief to thousands. The new rules allow the same flexibility promised by them. No need to do a dodgy backstreet deal.
THE BAD:
- Will there be a stampede out of final salary into personal pensions? We hope not. Rules must be tightened otherwise the seeds of the next pensions’ scandal will have been sown.
- Tax. Will many more thousands have to complete tax returns to take account of their fluctuating incomes?
THE UGLY:
- Without careful management you could spend your entire pot and run out of money. Good advice will be crucial.
- Could your creditors force you to hand over your pension pot to clear your debts? Or cover long term care costs? Time will tell but you can bet your bottom dollar someone will try.
Undoubtedly there will be some devil in the detail – watch this space for further details – but from April 2015 it would seem that your hard earned personal pension pot can be fully controlled by you.
And that’s a very good thing.
What are your thoughts? Share them with us. Want to find out more?
Call us – 020 7993 4898 or drop us a line advice@www.townclosefp.co.uk