So who’d have thought that the Chancellor would actually introduce such sweeping and dare I say, sensible changes. He kept that well under wraps.
What he’s effectively done is to trust us with our own pensions and savings. He’s removed many of the restrictions and limitations on how you take your pension income and how much you can take as of this week. By this time next year most other restrictions will be removed. We will be able to take out as much of our pension ‘pot’ as we like, once we reach retirement age and it will be taxed in a more reasonable way.
Worries that people will go mad and blow it all on buying a superfast car and have nothing left to live off are probably wide of the mark. The Australians have had this system in place for years, and their highways are not full of silver haired retirees in Ferraris.
Worries that these changes could add fuel to the property boom could however, be closer to the mark.
The introduction of the pensioner bond with a return of up to 4% should prove attractive for many people with inflation currently running at 1.7% and may prove a welcome home for some pension monies.
Other changes included raising the ISA limit to £15,000 each year and taking away the restrictions on transferring from a stocks and shares ISA to a cash ISA. Now ISA’s are just ISA’s or in fact NISA’s. Chancellor’s never give up the opportunity to introduce a nice acronym!
All in all the changes introduced have swung the balance back a little more in favour of savers after years of ultra low interest rates and overly complex savings and pension structures. George has not only become more of a savers friend but he is also helping them to kick the habit.