Pension pots are depleted by £1 billion – and Osborne says it’s good

[Image: Telegraph.]

[Image: Telegraph.]

Around 60,000 people have taken more than £1 billion from their pension funds in two months, as a result of new freedoms which allow over-55s access to their pension savings without incurring huge charges.

George Osborne wants you to believe that this is a good thing.

In fact, it means the economy is enjoying a short-term boost while people spend the money – but then, of course, they will be £1 billion short of cash when they finally retire. Unless they are already very wealthy, these people are robbing their future to pay for their present.

According to The Guardian, Tom McPhail, head of pensions research at financial advisers Hargreaves Lansdown, said the change was equal to the Right to Buy council house sales revolution of the 1980s: “In the same way that Margaret Thatcher introduced millions of people to home ownership, George Osborne is now introducing millions of people to pension ownership.”

Oh really? And what happened to all those newly-privatised homes?

Most of them were sold on to private landlords who then rented them out at a higher cost. Meanwhile the UK’s council house stock was depleted so badly it never recovered.

Is that what’s going to happen to pension funds? Fatcats benefit while funds are depleted beyond help?

If so, Osborne can keep his backward-facing ‘reforms’.

His friends are already making far too much money from the rest of us.

Follow me on Twitter: @MidWalesMike

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  1. Thomas June 17, 2015 at 12:21 am - Reply

    That will lose the Tories pensioner votes in the future.

    • crazytrucker1951 June 17, 2015 at 11:53 am - Reply

      I thought that before the recent General Election, but here at least the Tories did not lose the “Pensioner” vote, mine, they never had in the first place to lose! I guess the vast majority of my fellow pensioners fell for the gigantic Tory con trick of all time.

  2. Tony Dean June 17, 2015 at 7:11 am - Reply

    I feel I should point out that £1 billion is just half a percent of the potential so there has been no mad rush to cash in. There is a good reason for that despite the propaganda by shopping around on the open market there are very good annuity rates available, especially impaired life ones. (My wife just got a 6.8% annuity and has 7% and 9% for other annuities, and my annuity is 7%.)
    You need to be desperate to cash in given the income tax liability can be up to 45% or 75% of the pension pot.

    • Charles McLaughlin June 17, 2015 at 6:43 pm - Reply

      if you were able to obtain a return in excess of 7% you were very lucky or the company was miles out of the market. As a retired IFA with access to the complete open market I was only able to obtain 5% and that with a heart condition two years ago. Since then I have had cancer with a 25% chance of living 5 years. It is not often that the idiot Osbourne does anything right being more interested in enriching his friends but perhaps he has done it accidentally on this occasion

  3. Chris June 17, 2015 at 12:58 pm - Reply

    The many that will fall for scams will be left with little or no money in old age.

    Believing the flat rate pension is £155 per week for all, when the truth is the single tier pension never existed.

    Everyone will get wildly different amounts.

    Forecasts gained for retiring on and from 6 April next yer, 2016, have been gained as £106 per week, £66, £55, £44, £38, and the lowest forecast seen so far is £8.39 per week after 45 years in work.

    No top as Pension Credit (savings) is abolished next year.

    The older couples retiring next year, have the wife with nil state pension, with the end of the Housewife Pension. So too the Widows Pension.

    So the flat rate is a CUT to the current basic state pension and loss of Pension Credit to people who have had the money to save over their working lives. But savings will not last long the pay the bills. Certainly not over their entire retirement, or anything like.


  4. Barry June 23, 2015 at 10:19 am - Reply

    So lets just get this straight the tories introduced the private pension schemes for all, which lead to people paying for all of their pension as companies did away with company supported pensions to which they had paid in additional monies, the state pensions were drastically cut back, and now they want you to spend the money you had saved for your pension before you retire to boost the economy now, but will leave you worse off when you actually retire at the extended age of 67?

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