Pension freedom - how is it working?

It has been over 18 months since the 2014 budget when, in a surprise announcement, the Chancellor announced that instead of buying an annuity with their pension funds people would be free to spend them how they wish.
Here our adviser Peter Harrison explains

That plan was put into practice last April.

So have you bought your Lamborghini yet?

Well, it’s not quite as straightforward as you might think .........

 

·         First, you have to be over 55 to get access to your pension money.

·         Then it has to be the ‘right sort’ of plan – a lot of public service pensions are not included.

·         Some pension plans, especially older ones, do not yet have the facility to allow you to take all your money out. The government have made it clear that they want to make providers change their rules and cut their costs to let this happen, but in a lot of cases it is taking a long time to take action.

·         It can be expensive – some older plans impose financial penalties for early access, but, again, the government are looking at ways to control this.

·         And then, after all this, there could be a lot of tax to pay. Although it has been spelt out many times, it is not always easy to be sure how much tax will be taken off and how to get tax back if too much has been paid.

Cutting the cost of Christmas

Autumn is upon us and our attention will soon turn to Christmas!  A time of festive cheer… or financial woe?   With our tips below you can be sure to be full of merriment without breaking the bank and without having money worries to last into the New Year.

Remove unnecessary gift giving

Christmas has become a retail festival – but it doesn’t have to be that way.  Think about why you are giving and to whom.  Consider the recipient’s viewpoint too, as giving creates a need for them to give back.

Why not agree to a secret santa with family or friends?  Pick names out of a hat, buy one present in the group and stop buying unnecessary gifts.

Make a list
Don't go on impulse. A list will guide you and keep your spending on the straight and narrow!