Sunday, Jan 04, 2015

Pensions could become last gasp cash machines

BBC: Minister: Retired 'could be given right to sell pension'

Existing pensioners could be given the right to sell their pensions under plans floated by the pensions minister. From April, working people will be able to cash in their pension savings for a lump sum when they retire. Liberal Democrat Steve Webb told the Sunday Telegraph he wanted to extend the scheme to existing pensioners.

Posted by enuii @ 10:11 AM (3392 views)
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6 Comments

1. stillthinking said...

as was pointed out in the comments, some people are living too long on existing plans and the providers will make a loss (after looting the schemes).

its better not to be involved with these things at all. maybe we could all try property!?

Sunday, January 4, 2015 10:44AM Report Comment
 

2. stillthinking said...

sorry to double post, but on another note. there are a slew of articles recently about cancer being random, and some doctor recommending dying of cancer being the best way to go. almost as thought the press is suddenly advising people to adopt short-lifespan lifestyles..

thank god I am not paranoid.!

Sunday, January 4, 2015 10:50AM Report Comment
 

3. hpwatcher said...

UK government attempting to produce stimulus to keep the economic party going a little longer. To be honest it is very seriously looking like it's running out of steam. Literally, everything has been tried but the global slowdown continues. I think we will get to housing soon enough.

Sunday, January 4, 2015 11:40AM Report Comment
 

4. libertas said...

I reckon they may aim to buy houses.

Really? Is it stimulus? No, IT IS NOT. Government have an issue with pensions that IS NOT about pensioners.

THE TOP RISK right now is collapsing liquidity. With rates heading negative, government will soon not have to issue bonds to pay off the national debt. Presently, pension annuity funds are FORCED to purchase gilts as a major weight of the portfolio. They are being asked to buy bonds that government will not have to sell. Thus, the reason for mortgage regulation (to help fund government) disappears.

Meanwhile, if Annuities are retained in their present state, pension funds will get zero to negative income from the bonds they hold.

We will also likely see banks being told that they do not have to hold reserves any more, at least not in Gilts.

We are heading to a situation where the market is essentially marking down debt, and the market is pushing government to push pensioners away from buying debt to having cash and purchasing assets. This will result in a new boom. Given that the market has made it clear that we have a housing shortage, expect folk to plough money into houses. Some will be deposits for their children, much of the rest will go into the stock market with some in corporate bonds.

Sunday, January 4, 2015 07:29PM Report Comment
 

5. libertas said...

This is the same reason the Federal Reserve ended QE. There were simply no more bonds to buy.

However, this will not stop the bond bubble from inflating further. It has a long way to go in my opinion. Debt will become so scarce that people will be chasing it to the moon. That includes mortgage debt.

Sunday, January 4, 2015 07:30PM Report Comment
 

6. mombers said...

My poor children will have to leave the country to avoid having to pay for the heaps of money being thrown at the grey vote...

Monday, January 5, 2015 09:19AM Report Comment
 

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