This month I’ve got several things to say (shout!) to the Government and indeed to everyone and anyone at Westminster, who has a finger in the increasingly complicated Pensions Pie. So, here are my thoughts for politicians of whichever party, because whilst governments can come and go, common sense should always apply! Â
- Stop messing with pensions. Whilst itâs sweet of you to continue making things more and more complicated, so more and more people are getting information-overload headaches and needing to consult financial advisers like me; the fact is, youâre not just messing with peopleâs minds but with their lives. So, stop it!
- For goodness sake, why not get better advice before putting things in place. Youâre all very busy making everyone else get advice, before even thinking of utilising the new pension freedoms. Why not take a leaf out of your own book?
The way things stand now, if someone wants to access their pension, whether taking it all out in one go as cash or in stages, they need the advice of a good financial adviser. This is so all of the implications can be considered, not least of which, is what will the withdrawal mean tax-wise. Laying hands on all your money in one go sounds attractive for many reasons but itâs not always as sunny as it sounds. It could mean losing a fair bit in tax payments that may not apply if the withdrawal was staged. Obviously, it makes sense for most people that tax liabilities should be minimised as much as possible.
So, my point to Government is why don’t you also get some sound advice on board before implementing changes and why not take this advice from people who understand the full implications of what youâre thinking of doing? Once youâve got that very expert advice and input â Listen to it!
- Stop moving money from one place to another. The Government have made the decision to increase the inheritance tax allowance for houses, so itâs now going to be up to ÂŁ1 million for a couple. Naturally, this increase is costing the Government money that needs to then be recovered from somewhere else.
Well, pensions hadn’t had any changes for a whole few weeks, so it was decided to decrease the lifetime allowance (how much youâre allowed in total in all of your pensions) to ÂŁ1 million. Thatâs a sum that may sound substantial, but by the time you reach retirement and want to buy yourself a decent income, it isn’t necessarily quite as substantial as it sounds. A lot more people now need to think about whether they should stop saving into pensions, before being hit over the head with a lifetime allowance charge. Isnât there a saying, âYou shouldnât borrow from Peter to pay Paulâ? Â
4. Once you have made a policy decision, get everything in place well before it becomes law. In that way, everyone can get everything in order too in good time and with no panic. I mean, thatâs just plain, simple common sense, isnât it?
