Over 55s being refused access to pension cash already.

[I1L2T3]

Because it would make more sense to use the money to pay off a mortgage perhaps?

 

Definitely could make a lot of sense. The only issue would be if the tax on cashing out the pension pot exceeded the amount of interest that would have been paid over the remaining mortgage term. Then it could have been a bad financial move but as with all things financial, interest rates can never truly be predicted.

 

Similar argument for credit cards. If the tax paid on cashing out the pot would be less than the interest paid on debt then it could make sense to clear debt. Problem with a lot of people is they'd just go straight out and get another credit card though.

 

If it was me I would probably take a risk on potentially paying more in tax just to secure the roof over my head. The other positive thing is the property would potentially be an asset that could be leveraged further down the line e.g. for equity release or social care. A lot more sensible than piddling the pension pot up the wall on cars and holidays.

[aliceBB]

Indeed:D

 

This is excellent legislation that allows individual choice. There is no danger of anybody impoverishing themselves, because we already have the state pension as a safety net.

 

It will set a lot of people free from the clutches of the financial services industry. Well done Tories:)

 

 

There is every danger of some people impoverishing themselves, but that doesn't make the legislation wrong.

 

Do you find missing the point (not to mention irony) comes to you (or more accurately, your invented internet personae) naturally, or do you have to practise a lot?

Edited April 9, 2015 by aliceBB

[loraward]

 

 

 

Do you find missing the point (not to mention irony) comes to you (or more accurately, your invented internet personae) naturally, or do you have to practise a lot?

 

What point do you think I missed?

 

Speaking my mind and being who I am comes very naturally.

 

On another thread you warned me about a troll and I thank you for that, but now you are the one doing the trolling.

[Alan Ladd]

Whereas if Labour had brought it in, it would be seen as 'Liberating peoples hard earned money from Greedy financial institutions' ?????

 

I don't argue that some people are going to waste it, some will blow it all on rubbish, piddle it up the wall or give the lot into dodgy investments.

 

but it's just giving people access to their own saved money - you can't control people for ever, at some point you've got to let them make their own choices.

If you can't sensibly control your money into your 50's then it's a miracle you've made it this far in the first place.

 

 

At last a common sense reaction, well said.

[loraward]

At last a common sense reaction, well said.

 

I don't get why some people are complaining about it.

 

Person A spends all the money they earn on what they want throughout their life, and they put nothing into a pension.

 

Person B saves some of their money in a pension and now as the right to take it out and spend it in the same manner that person A spent it, but it is unlikely that they will.

 

Give person A £100K and they will likley do as they did all their life and blow it.

 

Give person B £100K and they are very likley to be prudent with it and spend it wisely.

[Alan Ladd]

Precisely, and as this government has, with Labour support brought in the triple lock on state pensions no one will starve.

[truman]

I just think this is a licence for stupid people. Why would people want to take all or some of their pension money out early. Its taxed anyhow. Why not retire normally like the rest of us and draw on a pension.

 

Have you seen the annuity returns lately?

[donuticus]

The upshot is that many people will end up with no private pension provision at all and will become completely reliant on the state in retirement.

 

Its a very ideologically driven policy which empowers people. In some ways it is good to allow people to break free from being locked into annuities but the whole policy relies on people being smart enough to realise that opportunity. And a lot of people just aren't smart enough.

 

And that's nobodies fault but their own.

 

People are being given the opportunity to access a lump sum from their pension pot and are being given the opportunity to spend it on whatever they want. If, as opposed to paying their mortgage off or something smart, they choose to buy their own bodyweight in marshmallow fluff then that's their decision.