Calis Beach and Fethiye Turkey Discussion Forum
General Topics => The Debating Chamber => Topic started by: Rimms on March 21, 2014, 15:04:32 PM
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A government minister today said that people retiring with private pensions will be able to take the lot in cash and if they blow that on a Lamborghini and then have to fall back on the state then it's their business. Agree or disagree ?
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Yes I agree, he did say that.
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I agree,it's your money,spend it or save it as you want.
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Totally agree, why not be able to use the money that you have saved over your working life as you see fit instead of having it mis-managed for a small annuity? Will do wonders fo the economy as well as we all run round buying flash cars and living the high life ;)
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Rather than buying a Lamborghini I think a much greater likelihood is that they use the money to give their children the deposit for a house, or open an account for their grandchildren's education. In some families maybe the children would drop some fairly heavy hints that this is what they expected now there was "so much money" in the family. In fact if you were pretty sure that you were near to having to go into a care home it might not be such a bad idea - the state would then pay for it. My main concern about the change is whether people are knowledgeable about finance to make sensible decisions (I suspect many are not). The Government promises that financial advise will be available, but no details are available. I realize that annuities aren't a brilliant vehicle for people's life savings but I am not yet convinced that this is the best way of dealing with that. It would certainly be a short term boost for the Government's economic policy if people took out their money, paid tax on it and then spent a big chunk of it buying UK products (e.g. a car manufactured in Britain, or a big holiday bought from a British travel agent). Even buying imported products would help to support "the economy is recovering" propaganda before next year's general election.
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Agree if you don't save you fall back on the state pension. It just means if you spend all the money you saved all you will have is the state pension entirely up to the individual, why shouldn't they spend there own money
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It's your money. But I don't think it will be spent wisely. As others have stated, it will boost the economy short term, as the PPI payouts have.
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My OH is 65 in May this year. Circumstances have meant that he has had several different pension pots to sort out. He's already taken the two larger ones and got a lump sum and annuity with both of them. However, there are still a couple of other small ones he can take from May. The annuities he could get from these (together) would be about £60 per month. He'd much rather get lump sums from both and invest elsewhere. He's now going to look at deferring payment of these until next April and do that.
In cases like these then this could be a good move. He's also got enough financial know-how to invest larger sums without blowing it (or not all of it anyway! ;))
Maybe the majority of people who have been sensible enough to save for their future retirement would also be sensible enough not to blow it as soon as they get it. But, at the end of the day, it's their money, their choice!
Looking at the other side of things though, my dad who's 88, retired at 65 with a decent pension he'd worked hard to provide for. He never dreamt he'd live this long and has said for a long time now that his pension provider can't have made any money out of him after paying him his pension for the last 23 (24 in September) years! ;D
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I've been ripped off by Black Horse Pensions, Sun Alliance and financial advice.I've claimed against them using the FSA.
I've received compensation but still lost a lot of money to these "experts ".
Without any financial skills or training I have since secured my future using my hard work, my wits, and common sense.
The City is up in arms at these changes, perhaps because their noses are being edged out of the trough. Ed Balls is
appalled that pensioners will be able to manage their own savings.!! Would YOU hand over your life savings to Ed Balls to
manage for you.?
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The opportunity has come to show that we don't trust any politician, so I certainly will take the lot and invest it myself, I think it is too late for me to do the same with Gordon's unless it is retrospect, which I doubt. Gordon took the lump sum, should anything happen to him then I will only get a smaller percentage. I think this is unfair, he paid in from his work but we both budgeted for it so the surviving spouse should get the lot for their life term.
Is the law still the same regarding gifting your children (probably now adults) an amount of money or trusting it so that inheritance tax or any tax is not deducted as long as you survive for a further 7years? I have another 18months to 2 years to sort this mess out thankfully.
I would still be interested if this is something that can be amended after being forced to take an annuity.
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Yes you can still gift money and if you survive 7 years there is no tax to pay, my mother did this
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Is there not a limit of £7000 that can be gifted ?
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There is no limit to the amount of money you can gift to your children but if you die within 7 years they may have to pay Inheritance Tax on some of it. To be liable for tax your estate must be over £325,000 or £650,000 for a couple (a relatively recent change means the surviving partner retains the deceased partner's exemption). The tax rate is 40% on sums over this limit but this reduces pro-rata after you've survived the first three years.
You can also gift £3000 each year with no tax implications - e.g. if you had 3 children you could give them £1000 each (a couple could give double). In addition each grandchild can receive £250. If you didn't use these provisions in the previous tax year the exemptions roll over for one year only.
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Thanks for that info Colwyn
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Patrice, I should add that there may be special rules for people who are over 2000 years old. You'll need to ask Dr. Who.
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For what it's worth, I think this is brilliant and I can't understand why it seems to have received such a lukewarm reception? Before I continue, I need to state my position that I'm already in receipt of my occupational pension and so the change won't directly affect me.
Over the years I've seen many people I know exercise their right to spend every penny they earn or either make benefits their lifestyle choice, stating that the 'state' will provide in my old age.
I have seen many people who have decided to invest in property for their old age, these assets are then liquidated as seen fit and if cash runs out then there is always pension credit to fall back on.
Finally there are those who have invested a fair proportion of their life long salary into work based pensions and once retired have been compelled by law to take what is often a very poor annuity, more often than not, any payment received from the annuity classifies you as a 'rich pensioner' where you won't get a penny in benefit from the state and of course if you need any sort of dedicated care, unlike groups 1&2 above, you will be forced to sell your home to fund your needs.
For me, this change puts everyone on the same footing, if you want to blow your cash and then fall back on the state, it's your choice, however, I doubt if many will. But at least, now you have the choice.
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Ha ha :-[ Colwyn tried to change it but without success ... : :)
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But can the pension that was forced to Annuity last year be cashed, in retrospect to invest as we please? I think there will be phone calls next week. bet we can't get an answer.
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In a word. No