From 6th April 2015, things are changing for anyone aged 55 and over with a pension pot!
Indeed, all the money saved for your old days, can now be released for whatever reason.
This is welcome by many - but can also be dangerous as people could go to an endless shopping spree.
Of course, all depends on the amount available but there is no restriction.
A couple could decide to buy a sports car, go to luxury hotels and get the best meals and stay in expensive hotels throughout the world. Meanwhile, the direction of investment property and the buy-to-let is the popular choice for many. There is no need to rush a transaction whether it is for a car, clothes or travel. The excitement is natural though... because it is something which could change your lifestyle.
A few UK pension companies were ready to receive their clients on Easter Monday - so much so that their offices/branches were open on that particular Bank Holiday!
Surely, when you reach a certain age you are getting wiser but who knows - especially when suddenly you can get something instantly by unlocking this amount of cash, initially destined to cover your life after work.
The great thing is that most sensible people will think, and then decide what is best. Because investing is certainly a great idea - as long as it is worse it and with minimum risks. It would be awful to see all this financial effort reduced to nothing due to an inconsiderate decision.
...The Association of British Insurers, which represents the big pension firms, has warned consumers not to “panic or rush into making decisions” and to be on their guard...
Nowadays, getting a mortgage whether you are first buyer or not can be hectic and stressful. Now, this important announcement may allow parents/grand-parents to invest for themselves but also support their child(ren) and grand-child(ren) as the deposit is usually the main problem.
We all know that landlords are rather pleased when it comes to adjust their rents because the demand is high and consequently there is (almost) not limit. Renting is expensive but it wins over buying an accommodation.
A mortgage monthly payment is generally cheaper than a rent (sometimes it can be half the actual amount required by the proprietor). The credit crunch didn't help the potential buyers because most banks became careful about who to lend money to. It became a chain reaction or a snowball effect - call it whatever you want but families started to struggle to get through their expenses without asking for help and support.
Financial establishments started to reduce allowances and this triggered a situation where UK housing repossession was involved. It is a serious matter with heavy consequences, where a protocol and procedures need to be followed (read HERE).
Will the pension pot new rules/legislation change the UK economy and the way people deal with their finances?