We are delighted to see the current Government take such a keen interest in personal financial issues with a series of big reforms. Firstly, the most significant impact will come from radical pension reforms that will come into force on April 6th this year.
The reforms, unveiled in last year’s Budget, allow anyone over age 55 to have full access to their pension pots paying marginal tax rates.
In the past savers had to either buy an annuity or use heavily regulated drawdown services that only allowed strict amounts to be withdrawn each year. Or you could withdraw the whole lot and be slapped with a 55% charge.
This is a big shift. From April millions of savers over 55 will have access to large opts of money that they did not have before.
It could have major implications for the mortgage and housing markets.
Secondly, the Treasury has unveiled pensioner bonds meaning anyone over age 65 can access inflation and market-busting saving rates of 4% over three years.
Considering the Government borrows money at just over 1% and is allowing pensioners to lend to it at 4%, this is a significant bung.
The bonds will last until the end of May (just after the election!!) and up to a maximum value of £15bn. Demand was so great that the website crashed on the first day.
Thirdly, Prime Minister David Cameron has promised to protect pensioner benefits such as inetre fuel allowance, free eye tests and TV licenses.
He has also promised the state pension will rise in line with inflation, earnings or 2.5%, whichever is higher – the so-called triple lock.
We believe these are great news for pensioner looking to manage their personal finances in the next few years.
It brings huge opportunities to bring in your mortgage and housing needs as well as those of your children.
The big reforms means mortgages, savings and pensions can come together to create flexible retirement plans for older people
Your pension money will be freed up in April meaning you can pay off mortgage debt or give the grandkids a deposit for their first home.
We can also offer remortgage solutions for your home so you can release some equity to fund retirement or for other needs.
We have seen much talk about how savers will invest their new freed pension pots to pay for their remaining years.
With the British obsession with housing and rising house prices, buy-to-let landlords are a big choice for many.
Research suggest up to half of London savers are planning to become landlords with their pot of cash by investing in homes.
Being a landlord could provide a stable asset –through the property – alongside a recurring income through monthly rents.
It is certainly an option once you have sought investment and mortgage advice and one many are clearly considering taking up.
The personal finance revolution underway brings up many possibilities that must be explored by the discerning investor.
It’s a great time to seek out advice on your big financial decisions and ensure you make the most of what the market has to offer.