With three jokes, brightly coloured ties, help for scouts, girl guides and Bingo and one of the biggest pension changes in recent years, this was one of my favourite Budgets.
From April 2015, pensions income can be taken from defined contribution pension schemes as the policy holder wishes after the age of 55. Annuity purchase will still be available but only those demanding absolute security on their retirement income will purchase a lifetime annuity.
The importance of quality financial advice will become much more important to ensure pension funds are not drawn down too quickly. The search for yield from the wide choice of investment options becomes the perfect domain for whole of market financial advisers.
The Chancellor announced new pensioner or “granny bonds” to be offered by National Savings and Investments which will launch a fixed rate bond close to 4 per cent for a three year fixed term.
This may be a sensible financial planning choice as traditional low-risk, reasonable yield investments, such as with profits bonds and cautious income funds which may be yielding 5 per cent, will be subject to FCA compliance.
Buy-to-let will increase in popularity due to the shortage of housing and the attractive yield that sensible buy-to-let provides.
An amount of £20m has been allocated to the provision of financial advice to the at the retirement market. Compare the £200m allocated to pot holes to the £20m to advise the close to 2,500 people a day that hit age 55, which is more important?
The Chancellor said unbiased financial advice would be provided to bridge the gap for those at retirement. Unfortunately it looks like the Chancellor meant financial guidance which could be dangerous for those that are not as capable as the Chancellor indicated in managing their retirement money.
Kim North (email@example.com) is managing director of Technology and Technical