02/10/14Stop…I need time to catch up!
You may wonder why the iconic picture of Marvin Gaye sits atop my blog this week. One of his many legendary hits had the title ‘Whats Goin’ On?’ and that’s exactly what I’m being asked this week by my clients!
Mr Osborne has done it again with the reversal of a 55% tax charge on any pension fund passing down the family line. This comes into force on April 6th 2015, along with the lifting of the restriction as to how much cash you can extract from a pension fund. Add to that the re-announcement of ‘no compulsion to purchase an annuity’ and you suddenly find yourself thinking ‘what’s going on?’
My own belief, is that this is trying to create wealth for the next generations. We already know that austerity measures will continue for 3 or 4 terms of government at the going rate and that the gap of ‘Middle England’ is now wider than the country itself.
With more people about to face being Auto enrolled into pension schemes over the next 3 years (from 2016 120,000 COMPANIES A MONTH with need to sort this out), it is clear that the Coalition are trying to make pension schemes-regardless the size of the pot-a very advantageous investment to provide income for the retiree, but also for that capital to be passed down to future generations, with the aim to help the next generation have deposits for homes, money for schools etc, without having to borrow too much. This will then hopefully trigger our children (& grandchildren) to see the benefits of a pension scheme and for them to get involved, or better still, to get the kids saving into one as well if possible.
I also think (or is that hope?) that Inheritance Tax will be reviewed. I long for the day to see Inheritance Tax raised to £500,000 and applied only if the ‘family house’ is passed down to the next generation. If it is sold, with cash given to the next generation, then it is passed free, allowing the beneficiaries to purchase a house, or start a business & employ people, so it is put back into the economy or used to create jobs. that’s my philanthropy done with.
For some, retirement is too way off to even start thinking about it, which I totally understand, but if you wait to when you can see, feel, touch and smell it, then its probably too late.
Out of all of this, Politicians of all parties have made us talk about pension schemes and made us think about our ability to live on £140 per week state pension, that seems to be moving further away from age 65 that I grew up with.
If this latest blog has made you want to have a chat then please visit www.business-ifa.co.uk where you’ll find all my contact details.
Have a great week and don’t forget, 3rd Monday of every month, 7pm-8pm catch my Radio Show on HCR104FM or, if you’re out of the catchment area, listen online!!!