Pension freedoms - Lamborghini or bust
So it would appear that only a couple of days into the new tax year – and the new pensions freedoms – and chaos has broken out…..
Well perhaps chaos is a slight exaggeration, but we have heard reports of HMRC help lines not being able to cope with the number of tax related pension enquiries, that the Pensions Wise service (set up to provide free ‘guidance’ not ‘advice’) is being criticised for allegedly publishing misleading information and product providers are experiencing a sharp spike in ‘freedom’ related enquiries into their call centres.
It is hardly surprising really, the changes to pensions brought about by The Taxation of Pensions Act 2014 (which came into force on 6th April 2015) seem to have been mentioned in every news bulletin since Mr. Osborne stood up and dropped the bombshell in his March budget statement last year and further expanded within his Autumn statement last December.
So what now? Take it all out? Buy a Lamborghini? Buy a rental property? Take nothing?
The dilemma is not a simple one. The correct solution for you will depend on your personal financial position and other resources available to you, your age, state of health, life expectancy, gilt yields and annuity rates, attitude to risk, capacity for loss, investment market performance etc etc……
The fact is that the decision you make now will be one of the most significant you will ever make and taking professional advice from a suitably qualified adviser is crucial – buying that Lamborghini could well mean buying the tax man a Porsche. Worse still it could mean riding a push bike in your 80s and 90s…..
We will be running a free hour long seminar on 14th May where we will outline the new rules in detail and the pro’s and con’s of various pension income strategies.
If you would like to attend please register on our event page.