Money Mail Campaign 'Unlock Our Pensions'

[Midwest]

I seem to recall a while back, talking to a member about annuity pensions, and the then Chancellor George Osborne bringing in a new law allow pensioners unlocking themselves from annuity pensions and cashing in their lump sums.

Well it appears the new government under Theresa May has decided to do a turn on this, a few months before the new rules come into force.

The Daily Mail is launching a campaign; Can MPs who stopped savers cashing in annuities really understand their pain? | Daily Mail Online - http://www.dailymail.co.uk/money/pensions/article-3962662/The-pensions-divide-MPs-stopped-savers-cashing-annuities-really-understand-pain.html

There's a letter to copy and send to the new Chancellor Phillip Hammond, in the link. If your in this position, might be worth trying.

 

[Pat H]

To be honest I didn't agree with the plan in the first place. Pensions were sold to us as a tax effective way to save and at the end you got a lumps sum and an annuity. That was the deal. Seemed to make sense. A small lump as a treat and an income till you die.
Of course its a money making concern for all those involved and many get very rich on providing these services. That's capitalism.
The idea the rules could be changed so the whole pot could be spent and non saved for the future was just a short term trick to get money back into the market place. All those retired folk who then spent all their pension pots on fast cars would have to fall back on the state pension. So we pay in the longer term but in the short term monies to be made.
And of course the plan to allow previous annuity purchases to be reversed was just plain madness but it was vote buying.

I agree it wasn't fair to promise to do it and then not but if we actually held politicians to account for what they promises where would we be?

 

[Midwest]

What a load of tosh. The money invested in these schemes, is your money. These types of pension schemes make money out of your money and rely on you dying early, so they can make even more profit, unless your lucky enough to live to your 90's and break even.

I was fortunate enough, to have not purchased an annuity with the lump sum I accumulated, and was able to take the whole amount as a lump (after tax), when the rules changed in 2015. I used the money to pay off my mortgage, and not a fast car. Everyone has a right to a state pension whether or not they have paid into a private pension. My private pension was several thousand pounds, but if I had purchased an annuity, I would have received a yearly pension of £300, hardly a viable income, and I would have to have lived until I was 87 to break even.

 

[Pat H]

The money invested in those schemes may be yours but it was invested in a contractual arrangement that was agreed when you took out the pension. It may suit some people to want to change those contractual rules but that was the deal.

Pensions are of course a gamble and the house always wins. You don't have to play the game but the government does all it can to encourage us all to "play the game" so all their mates can make out of us. So what's new.

The rule change in 2015 has seen a massive increase in people being ripped off of the money they could then get hold of. So much so the government are bringing in laws to try and kerb it. Nice they waited a year rather than see the writing on the wall and cover it in the original legislation.

I've changed my pension arrangements a few times and its now (apart from my state pension) in a scheme that gives me the control I need. Its in a trust so if I die and my wife dies the kids get it all.
I didn't moan about the rules I just looked at the options and made the changes that suited me.

 

[Midwest]

You and I are lucky to have a pension that gives some form of control and predict the potential outcome. The problem with annulity pensions, are they don't give you much idea of salary etc, until you appproach an annulity provider with your 'pot' and they will then offer a pension. These schemes were often mis-sold, locking people in. I was given incorrect advice when purchasing my top up pension, but realised this before investing too much money.Other people haven't been as lucky.

 

[telectrix]

this annuity thing is a complete con trick.my missus was forced (by law) to take only 25%of her money on which she was taxed, and the rest in an annuity. the amount the annuity pays out per annum means that she will need to live to the age of 114 just to get back money that is hers by right.

 

[Pat H]

True its a deal that suits the seller.
But you have to sign the forms with the terms on them.

 

[FatAlan]

Probably find that the U turn is down to the fact that the cash is not there in the first place. I tend to agree with the views that the pension industry is just a gravy train for the fund managers who make a fortune on commissions. A sudden rush of people cashing in probably does not fit or is not workable on whatever 'business' model they work to. IMHO

 

[Octopus]

this annuity thing is a complete con trick.my missus was forced (by law) to take only 25%of her money on which she was taxed, and the rest in an annuity. the amount the annuity pays out per annum means that she will need to live to the age of 114 just to get back money that is hers by right.

I find that VERY hard to believe.

For me I have the state pittance to look forward to plus a money purchase scheme - which I plan to do draw down on to avoid committing to an annuity

The misses will have her state pittance PLUS her NHS gold plated index linked pension -so happy days.

 

[telectrix]

I find that VERY hard to believe.

For me I have the state pittance to look forward to plus a money purchase scheme - which I plan to do draw down on to avoid committing to an annuity

The misses will have her state pittance PLUS her NHS gold plated index linked pension -so happy days.

my post is accurate, the pot in question was £9500. she could only draw 25%, leaving £7125 in annuity, which pays out £180 per year.

 

[HandySparks]

What was proposed wasn't a pension 'buy back' scheme. To 'cash in' an annuity, you'd have had to find a company who was willing to offer you a lump sum in exchange for the right to receive your annuity payouts. If you've already bought a poor annuity with your pension pot, you're not going to get much of an offer for it, are you? The scheme was, in reality, a non-starter. There's no way anyone 'cashing in' would have received anywhere near the original amount used to buy the annuity.

 

[Octopus]

my post is accurate, the pot in question was £9500. she could only draw 25%, leaving £7125 in annuity, which pays out £180 per year.

That's a dreadful return - did she get "alternative" quotes for her annuity? If not maybe a complaint could be on the cards.... NEVER go with the provider who has your money until you have alternative quotes to see if their offer is realistic.

 

[Midwest]

An annuity pension requires you to 'save' x amount each month, a savings account. At the end of your term (decided by you), you 'take' your pot of cash to an annuity provider, who offer you an annual pension. The annuity provider then invests you money, to make a profit. They do you no favours and offer you a pension that is worth more than your pot, as tels wife found out. When I enquired what my pot might get me in the future, I was told anything under £10000 would be unviable, most of these types of pensions require pots 10x that, for a viable pension.

You will read from the DM link, the large pension companies approached the new Chancellor that they couldn't afford to give back these 'pots', much like those companies who mis-sold PPI and endowment mortgages.


The only people likely to try and retrieve their 'pots' are those like tels wife, not the £1000000 investments.

Does annoy me when people say, it's your fault you signed the agreement. That was yesteryear, ask for financial advice now, and it has to be someone with suitable qualifications and not some bod in an office or on the end of a phone.

These polices were often mis-sold, and these multinational companies should be made to hand back the money they fraudulently obtained.

(from my mobile phone)

 

[Midwest]

That's a dreadful return - did she get "alternative" quotes for her annuity? If not maybe a complaint could be on the cards.... NEVER go with the provider who has your money until you have alternative quotes to see if their offer is realistic.

Annuities are provided by insurance companies, typically the savings for such are made with other savings company, i.e. you have a pot of money and you get quotations for your pot from these insurance companies. As I said in my previous post, anything below £10000 is unlikely to get you anything near what would deem to be a decent pension, and in reality you have to invest something 10 x that. Something that was not explain to me, when I took out mine. I was under the impression I could attach my annuity pension (it was sold me under the name of 'Top Up Pension'), to my other salary pension, which you cannot.

 

[HandySparks]

You will read from the DM link, the large pension companies approached the new Chancellor that they couldn't afford to give back these 'pots',...

I seem to have missed that bit. Can you quote the paragraph please?