Hooray for pensions!
This graph is a lot more significant than you think; it is entitled “Projected Exchequer impacts of pension’s flexibility measures in Taxation of Pensions Bill, 2015/16 to 2040/41 (as announced at Budget 2014)” or in plain terms, how much extra George Osborne and his team think we will all pay EXTRA in taxes under the new flexibility rules. I believe it is the clearest way to show how important it is to seek proper advice under the new rules. Remember this is over and above what we would all be paying if these new rules didn’t come in to play.
At Strategic Solutions Chartered Financial Planners we are excited about the new plans as we have always believed that pensions were very important, but had their limitations. These new rules should encourage more people to save into their pension plans and give plenty of tax planning opportunities along the way, to maximise potential returns. There will, of course, be plenty of horror stories in the national papers where the unwitting or unwilling proceed at full speed and make some mistakes, after all that is what makes headline news. But why deny freedom to the many to avoid the mistakes of the few?
Much nonsense has been already written about the responsibility of the public over pension freedom, people who have actively sought out pension provision in the past are unlikely to squander their lifetime of effort and savings on a whim. Those that do, probably didn’t take retirement planning that seriously anyway, so why shouldn’t they enjoy the money? What they will be “squandering” is probably not enough to make any significant impact on their lives if they were to take a “sensible option”! Let us trust mature adults to make informed decisions after hopefully taking out professional advice on the best way forward for them. As always, the media will run with the potential negative impact of a change but will miss the fantastic opportunities that may arise. It seems part of our reporting culture is to play on the fears and negative emotions of any situation, but overlook any inspiration or positivity.
All of us at Strategic Solutions Chartered Financial Planners will be encouraging our clients and any potential clients to embrace the new changes and firmly grasp the opportunities that proper planning for their retirement can offer. We aren’t saying that there won’t be some bad cases; which no doubt will be thrust down our throats in an effort to sell us a media product, but we believe overall the public will greatly benefit.
Hooray for pensions!