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Blow Your Pension Pot And You'll Lose Your Benefits

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http://www.dailymail.co.uk/news/article-3015437/Blow-pension-pot-ll-lose-benefits-Savers-warned-risk-refused-state-payouts-spend-nest-egg-luxuries.html

Blow your pension pot and you'll lose your benefits: Savers warned they risk being refused state payouts if they spend nest-egg on luxuries
  • Pension changes mean savers will be able to spend nest-egg as they like
  • But they are being warned they can't expect to fall back on state handouts
  • People risk being denied benefits if found to have spent cash on luxuries

Savers who blow their pensions on a Lamborghini – or any other luxury – under new freedoms are being warned that they cannot expect to fall back on benefits.

The Department for Work and Pensions says anyone who runs out of income after taking part in George Osborne’s pensions revolution could be refused state payouts.

From next month, under the biggest changes to pensions for a century, anyone over the age of 55 will be able to take their retirement nest-egg to spend how they like.

Does buying a BTL count as a luxury or a solid investment???

In a property crash this could get interesting if people lose their retirement nest eggs will the state refuse to pick up the tab???

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http://www.dailymail.co.uk/news/article-3015437/Blow-pension-pot-ll-lose-benefits-Savers-warned-risk-refused-state-payouts-spend-nest-egg-luxuries.html

Does buying a BTL count as a luxury or a solid investment???

In a property crash this could get interesting if people lose their retirement nest eggs will the state refuse to pick up the tab???

What about if you're relieved of a big chunk of your pension by the shysters who are already starting to circle with intent to 'help' marks with their pension planning. Is that considered a luxury...

I can see many a scandal fast approaching. I genuinely hope those 55 and over fight hard to hang onto the wealth they have accrued.

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So in future the roads will be filled with abandoned rusting Lamborghinis with the skeletons of pensioners who blew all their cash and starved to death sitting behind the wheel. Pull the other one.

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Impossible to do- how do you diiferentiate between investing in a horse or a safe yielding asset?

Its a scare story thats been put out to counter all the info that has run away with tiself over the last few months.

I would guess the few (and it is a few) people with DC pension of a responsible size, say, > 200k are not to be that daft to blow it.

The irresponsible pensioners that are a concern for me are those useless public sector fckers with unfunded ponzi PAYG pensions who expect me + my kids to pay for it.

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I expect that the only way to handle pension is for the state to hand out a set amount per person.

No means test, no bus pass, no winter fuel, no widows payment.

Any extra you get from a personal or company (any?) you get.

Sounds so simple + doable esp. after Gordon Browns 'vote for me' payouts.

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I expect that the only way to handle pension is for the state to hand out a set amount per person.

No means test, no bus pass, no winter fuel, no widows payment.

Any extra you get from a personal or company (any?) you get.

Sounds so simple + doable esp. after Gordon Browns 'vote for me' payouts.

I'm planning on them being means tested as we can't and won't be able to afford a little for everyone. That means my plans are based on receiving two thirds of f**k all from the State despite having paid plenty in for the benefit of others.

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I'm planning on them being means tested as we can't and won't be able to afford a little for everyone. That means my plans are based on receiving two thirds of f**k all from the State despite having paid plenty in for the benefit of others.

Yes, same. The trend is already there.

Regarding the luxuries thing - so if I blow my pension pot on a cruise....ahem...invest it in a research trip for a novel I'm writing - am I being irresponsible or simply unlucky in investment? In some situations, investing in a Lamborghini may actually be a good investment.

This is going to be near impossible to test, or enforce - otherwise what was I paying national insurance for decades for if not theoretically for a state pension when I retire.

Edited by StainlessSteelCat

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I can see a future where the only real pensions paid are those of ex-public sector workers while the rest survive on a few quid that will be the future state pension. Many of those who cash in will be left staring at their investment tulip bulb wondering about what happened.

I reckon they will protect the value of State pension, you won't get it very early.

Quickly moving to 68 and probably to 70+ thereafter.

The Joan Bakewell generation, who got theirs at 60, quickly pulling up the ladder to make it an exclusive club.

Edited by crashmonitor

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I can see a future where the only real pensions paid are those of ex-public sector workers while the rest survive on a few quid that will be the future state pension. Many of those who cash in will be left staring at their investment tulip bulb wondering about what happened.

Unfunded state pensions are neither financially or politically sustainable.

Try selling 2k/month ctax to a 20 yo to only get there bin semptied once a month as the rest is spent on pensions.

They'll be default on. Not sure how. Maybe there'll be a court case to declare that unfunded pension deficit are illegal - that is not that far fetched when you work through the logic. Public serices are a fraud as they are being sold with only half the cost.

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Wary of any news story in the run up to a general election - news stories which are often apparently used to sway voters one way or the other to vote for the various parties or to apparently favour voting for one party or another.

The archives are full of what they're going to do with "benefit scroungers" and people who "waste their money" over the years but the benefit culture along with introducing things like tax credits seems to get ever more systemic as time goes by.

Whether that policy is right or wrong/good or bad is another matter.

The Mail article above is along the lines of how austere the Conservatives were going to be before the 2010 election - if they got in power. Only to put debt into overdrive after getting into power.

Edited by billybong

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Is this any different to current depravation of capital rules.

In my current situation i have low income but savings, if i didnt have savings i would be eligible for housing benefit on the private rental i reside in, i too could blow the lot on a ferrari and then claim housing benefit, however surely i would be told to do one by the benefits gang

Im running down my savings slowly but surely ,purely as my outgoings are way higher than incomings with no particular aim in mind other than not work that much and not pay income tax.

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Tom McPhail, of investment firm Hargreaves Lansdown, said: ‘There is a risk if too many people with modest private savings spend all their money – the department could end up with a spiralling welfare liability.

That's exactly why people saved up in pensions and were encouraged to do so - before it became evident it they were just pools of money for the pension fund crooks and government to help themselves to.

Now they're going to penalise them for spending the money that the government is releasing to enable them to do that. What do they expect people to do take it out of the pension fund and lock it away in an instant access account to be further thieved away by the government through inflation - or put it in say equities to invest in a company/companies (give it to the directors) that dilute it overnight, go bust etc etc etc.

Crazy people crazy policies.

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The DWP said: ‘If it is decided you have deliberately deprived yourself, you will still be treated as having that money and it will be taken into account as income or capital when your benefit entitlement is worked out.’

No they won't have deprived themselves they'll have spent it on caviar and luxury holidays etc.

You do get a laugh as time goes on.

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It`s a gamble isn't it, trust the company pension system or the state pension. We wont get both for much longer.

I turned down my company pension.

And remember, cash still can be spent!

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Sure, the professional scammers are already circling, but...the biggest raid on pensioner's newly-released wealth will be from inside the family...

"Mum - now you've got all this cash will you help me with house deposit/pay off credit cards/university fees/boob job/decent car to get to new job/move up to a three-bedder now your new grandchild is arriving/old student debt/ help us fund this brilliant new business idea we've got etc...

After all, you said you'd leave it to me when you died anyway..."

Those pressures are going to be very hard to resist....

Edited by juvenal

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Yes but they will never leave old dears dying in the street. They will help them no matter what.

So they should....but only to a certain degree, they will make an evaluation on individuals financial and social worth to society....and treat accordingly IMO.....only a matter of time when available funds will be having to be spread further and further....quote: 'tough decisions will have to be made'.

.....there is no long-term safety net.

Edited by winkie

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And the bottom line is......

When my Grandfather got his first state pension in 1908 (?) he sat looking at the two coins with tears rolling down his cheeks (2 half crowns)

He was saved!

(equal to £20 today)

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And the bottom line is......

When my Grandfather got his first state pension in 1908 (?) he sat looking at the two coins with tears rolling down his cheeks (2 half crowns)

He was saved!

(equal to £20 today)

I hope he didn't blow his money on one of those new-fangled bicycles...

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