It is ‘Countdown’ time – but, sadly this time, without the wit of Nick Hewer and radiance of Rachel Riley to keep us entertained.
It is 87 days until we go to the polls and vote for the candidate and party who we think will best represent us in the House of Commons and govern the country for the next five years.
Although I am fascinated by politics – my best subject by far at university – I must admit I am already bored by the endless point scoring and stream of (empty) promises being made by the main parties (Labour and Conservatives).
Irrespective of what is said between now and polling day, difficult political decisions will need to be taken post May 7, many of which will undoubtedly result in financial pain for households up and down the country. Deficits need to come down which means more cutbacks and more taxes.
As you all well know, it is also ‘countdown’ time in the financial arena. There are only 55 days to go before new pensions freedoms are granted to those aged 55 and over.
No longer will people necessarily be trapped into buying a poor value annuity with the pension fund they have amassed over their working lives. Instead, they will be able to take their pension as and when they please.
It is all very exciting – and empowering. I also know many financial advisers are excited about the new pension freedoms because of the opportunity it gives them to advise clients through the new rules. But let us not pretend that the new era is without its risks. Dangers await the ill-informed.
By way of example, I was emailed late last month by a data manager called M Dajenais (gender not disclosed) asking whether I would be interested in ‘200,000 UK pension release leads looking to buy lettings’.
I was told the data was ‘fresh and less than 30 days old’ and that all leads ‘have opted in to hear about property investments’. If I wanted the leads, I was told, I should act fast because the data would only be resold ‘10 times’.
What a financial journalist would want with such data I have no idea. But I presume M Dajenais thought I was involved in the property lettings game (I am, in so much as I am a tenant in a flat owned by a money-conscious Italian landlord) and would be grateful of some new attractive sales leads – at a price of course.
No doubt, for some of the 200,000 pension leads identified by M Dajenais, releasing pension funds to buy investment property may well make financial sense. But releasing a big chunk of pension over and above the tax-free lump sum is not without big risks and potentially onerous tax charges.
I imagine we are going to see more of this as we get closer to April 6 – and rogues look to make money from the freer pensions regime, some illegally.