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200,000 Will Take Advantage of New Pension Rules

 

Ipsos Mori have released the first survey into soon-to-be retiree’s intentions when the new pension rules are introduced in April 2015. Published in The Times, the survey showed that 200,000 were already planning how they would use the pension money they would be drawing early, which was around 12% of the 1,247 people between the ages of 45 and 65 who were surveyed.

pension reforms and retirement plans

 

From April, the money drawn will be entirely within the control of the person withdrawing it, and many are already putting their plans together in advance. The majority were planning on cashing in to pay for a holiday, 13% were eager to pay off debts, 12% cited DIY projects as their reason, 14% wanted to use their funds to help family, and 8% had a new car in mind. A quarter of people also said that they would save a portion of their pension savings, deciding that long-term security was still a priority.

Tom McPhail, or Hargreaves Lansdown, suggested that more guidance and protection was needed for pensioners who choose to withdraw the majority of their savings, or even all of their savings at once. A spokesperson for The Treasury claimed that “freedom is a key part of our long-term economic plan”, but McPhail warned that “we also don’t want them paying unnecessary tax bills or running out of money.” 

For many, the funds drawn have investment potential for a lot of retirees, with property proving to be the most popular option. Another popular choice is peer-to-peer lending, which offers bank-beating interest rates. Money invested is not covered by the FSCS, but is regulated by the FCA. Wellesley & Co allows retirees to lend their funds and receive up to 6.67% return, whilst being protected by a Provision Fund that will compensate customers should a borrower fail to repay their loan.

Pension reforms have sparked debates as to whether or not people could end up in financial difficulty regarding their choices, with ministers having emphasised that people would be able to save, invest or even ‘buy a Lamborghini’.

With 200,000 already weighing up their options, reforms could trigger a huge flow of money into p2p investments from pension savers who necessitate an income.

Bear in mind

Wellesley Property Bond

  • The Wellesley Property Bond has a fixed rate and duration.
  • The Wellesley Property Bond is an ISA eligible investment, allowing you to earn tax free interest on your investment. Please note, tax allowances and the tax efficient benefit of ISAs could change in the future.

Your capital is at risk and interest payments are not guaranteed. Investment in any Wellesley Property Bonds are not covered by the Financial Services Compensation Scheme (FSCS). In the event of a loan default or if Wellesley Secured Finance Plc becomes insolvent, you may lose some or all of your investment, including interest payments due. If you are in any doubt about making an investment or do not fully understand the risks, you are strongly recommended to consult an independent professional financial adviser before you subscribe.

Wellesley is the singular name for the following collective of companies, Wellesley Group Limited (09811856), Wellesley & Co Limited (07981279) and Wellesley Finance Plc (08331511). Wellesley Secured Finance Plc was established as a special purpose vehicle for the sole purpose of issuing asset backed securities and is not part of Wellesley Group.

The information contained in this website has been approved as a financial promotion for UK publication by Wellesley & Co Limited (FRN 631197) who is authorised and regulated by the Financial Conduct Authority (FCA). Wellesley Property Bonds are issued by Wellesley Secured Finance Plc (the Issuer) and is not authorised or regulated by the FCA.

Wellesley & Co Limited and Wellesley Finance Plc are registered in England and Wales and their registered office and trading address is at St Albans House, 57/59 Haymarket, London SW1Y 4QX. The registered address for Wellesley Secured Finance Plc is at 1 Bartholomew Lane, London, EC2N 2AX.

 

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