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Pension pots

On 6 Apr 2015 at 11:52am Leveller wrote:
I'm off out today, having taken my lump sum 10 years early and i'm going to buy a top of the range motor...probably a Range Rover. I'll probably not live long enough to enjoy it in 10 years time so i'll have it now and if i do live long enough, the state, which i've contributed to for 40 years, can look after me.
On 6 Apr 2015 at 12:14pm Ello J. Gotta new motor? wrote:
I getting a Lamborghini before the spivs and sharks from the financial services industry try and steal it from me.Vroom Vroom.
On 6 Apr 2015 at 1:12pm Osborne`s slight of hand wrote:
What most people don`t know is that if you take more than 25% out of your pot, then you will be punitively wacked for tax on the rest you take out.This is a tax raising measure not a giveaway don`t be fooled.
On 6 Apr 2015 at 1:16pm Mavis wrote:
Pension pots are from already taxed incomes, so it's a double whammy again !!
On 6 Apr 2015 at 1:55pm Sleightly wrong wrote:
as is the info LOL come out the woodwork you anti spelling folk.
On 6 Apr 2015 at 3:04pm Annette Curtin-Twitcher wrote:
Most people get tax relief on their pension contributions, so not really taxed income. However, the money you get if you cash it in counts as income in the year you get it, so for a lot of people a fair chunk of it will be taxable at more than 20%, so you may well pay more than you got in tax relief.
Pensions are taxable too, so the tax man is just getting his share upfront if you take all your money out. Someone in Saturday's Guardian estimated the potential tax take at 4bn.
On 6 Apr 2015 at 5:47pm Sussex Jim wrote:
Just about sums it up, Annette. Pensions have been subsidised by the government; so it is only fair that they should taxed on payout.
The secret is to dribble your accumulated wealth out, to stay within the tax thresholds. Don't buy that Lamborgini outright: get a finance deal at todays' low interest rates!
On 6 Apr 2015 at 6:55pm Sussex Dim wrote:
O Yay! O Yay! Cough Sputter Splatter Tribble Dribble Wring Your Wealth Out! O Yay! O Yay!
On 6 Apr 2015 at 7:06pm Phfellow2004 wrote:
Perhaps I am old fashioned but the spirit of saving into a pension over a lifetime of work is to help provide for a comfortable retirement supplemented by a State Pension. The good news is that both occupational or private pension schemes will endure and provide throughout the period of retirement until death. With life expectancies these days stretching longer, the comfort of lasting income has to be a priority and it should be preserved. For those fortunate to have pension 'pots' which can be turned into cash, you are the lucky ones, but cashing in these 'pots' to spend on luxuries now will eliminate or reduce future retirement income needed for decades seems crazy.
There are some circumstances when cashing in pension 'pots' may have some merit but this is not the forum for this debate!.
On 6 Apr 2015 at 8:14pm Country Boy wrote:
I'm going to take 25% tax free and buy property - my kids can inherit property, they can't inherit my pension.
On 6 Apr 2015 at 9:22pm Historian wrote:
Don't fret the rules will change again ! Save for a buy to let mortgage and be in charge of your own destiny, as much as you can. The rent will be your pension income. Look at property prices in Norfolk, Lincs, & The North you'll be amazed ! Wait a few years sell up and move slightly South, do that a few times and you'll be laughing.
On 6 Apr 2015 at 9:22pm Sussex Jim wrote:
Country Boy, you talk a lot of sense. Property is the still the best investment, even in these uncertain times.
John Major (remember him?) said he would like to see wealth cascading down the generations. He was absolutely right.
On 6 Apr 2015 at 9:43pm Phfellow2004 wrote:
Ok, it is easy to talk about cashing in pension 'pots' to buy a property with a view to renting but there will be only a very few folk who will be able to liberate enough cash to do this. This thread is all about folk who may have the opportunity of cashing in much smaller pension 'pots' who must get it out of their heads to 'spend now and 'go without later'.....echoes of Gordon Brown and his fledglings Ed Miliband and Ed Balls!
On 6 Apr 2015 at 9:56pm Jenny wrote:
My friend is cashing in 11,000 of her pension to get rid of her credit card debt ! And she's only 61 !! Shouldn't think she's alone in doing that sort of thing.
On 6 Apr 2015 at 11:06pm Lewes Lady wrote:
Truly scary how thick some people are. Every single announcement regarding these pension reforms have included an entirely clear explanation about how 25% remains tax-free, with the balance being subject to the individual's marginal rate of tax.
This issue is no different to idiots taking out credit cards and getting hugely into debt - or blowing a fortnight's dole on booze on the first night.
But using part of one's pot to clear a debt incurring say 18% interest could be a sensible decision. That's the sort of flexibility that will become understood and appreciated over time.
As someone says above, you can withdraw approx 13,750 each year between age 55 and state pension age, without paying any tax - 25% tax free with the balance keeping within your personal tax allowance each year. Flexibility flexibility flexibility. Good news for anyone with a few quid and a brain; irrelevant to others.

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