Should you be allowed to cash-in on a rubbish pension?

17 October 2014

old man Ministers are calling for pension reforms, which will mean that pensioners who are locked into dreadful deals would be able to cash them in.

Sounds good doesn't it?

Pensions minister, Steve Webb said he wants to help those tied to poor-value annuities: "I know many people who have locked into an annuity are feeling rather bitter that they came just the wrong side of the line."

"It's been gnawing away at me and I want to say to those affected: I know how you feel. If it were possible for people who would rather have a capital sum than a regular income, in principle I would like to be able to help, and this is something the next government should have a look at."

The government have pledged that, as of next April, savers who are about to retire will be given full discretion as to how they use the funds from their pension. If you're over 55, you will be allowed to treat your pension like a normal bank account. Don't spend it all at once though eh?

However, there's a problem with those who have already bought annuities because they'll be excluded from this rule as it stands. Webb continued: "If we accept the annuity market was broken, we also must accept it was so 10 years ago."

The thing here is that Webb's views haven't turned into proper policies yet, so if you're a codger, don't get out the celebratory vodka just yet.

There's also talk of policing the pension sector to ensure that savers get a fair deal and that something needs to be done about the high charges that chip away at funds during retirement.

Ever get the feeling that the government might 'fix' all this by simply putting the retirement age up to 230, so no-one has to worry about it?

TOPICS:   Banking   Economy   Government

1 comment

  • shinkyshonky
    Vera Lyns alround

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