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Pension shakeup: I'm cashing in but not for a Lamborghini Pension shakeup: I'm cashing in but not for a Lamborghini
(about 2 hours later)
One of the first people to cash in their pensions under the government shakeup will use the money to help repair a church, pay for his daughter’s wedding and take his wife on a cruise.One of the first people to cash in their pensions under the government shakeup will use the money to help repair a church, pay for his daughter’s wedding and take his wife on a cruise.
Michael Gunn, a 57-year-old retired chartered accountant from Sidmouth in Devon, will start to receive the payments on Tuesday morning.Michael Gunn, a 57-year-old retired chartered accountant from Sidmouth in Devon, will start to receive the payments on Tuesday morning.
A pension has to last a long time, so I think getting advice is absolutely crucial
He has opted for what is called an uncrystallised funds pension lump sum, which leaves his pension intact but allows him to withdraw amounts from it.He has opted for what is called an uncrystallised funds pension lump sum, which leaves his pension intact but allows him to withdraw amounts from it.
Part of his initial lump sum will be donated to a fund to replace a hall destroyed by fire in an arson attack four years ago at St Luke’s Church in Newton Poppleford.Part of his initial lump sum will be donated to a fund to replace a hall destroyed by fire in an arson attack four years ago at St Luke’s Church in Newton Poppleford.
“They need to raise £250,000 and my modest contribution is going to be the start of the ball rolling,” he said.“They need to raise £250,000 and my modest contribution is going to be the start of the ball rolling,” he said.
“Everyone has been going on about people using their cash to buy Lamborghinis, so I wanted to stand it on its head and actually give some of this money away to start with.”“Everyone has been going on about people using their cash to buy Lamborghinis, so I wanted to stand it on its head and actually give some of this money away to start with.”
Later in the year, Gunn’s 27-year-old daughter Emma will be getting married, with some of his pension money helping to pay for the costs.Later in the year, Gunn’s 27-year-old daughter Emma will be getting married, with some of his pension money helping to pay for the costs.
He said: “Weddings are expensive things, so its useful to have that pot of money to draw on. Everyone seems to put an extra zero on all these costs.”He said: “Weddings are expensive things, so its useful to have that pot of money to draw on. Everyone seems to put an extra zero on all these costs.”
Gunn will also treat his wife Fiona to their first-ever cruise – aboard the luxury Queen Mary II to New York for their 30th wedding anniversary. Gunn will also treat his wife Fiona to their firstcruise, aboard the luxury Queen Mary II to New York for their 30th wedding anniversary.
He said that once the couple arrive in the US they will travel down to Alabama to see friends that his wife has not seen since school. He said that once the couple arrived in the US, they would travel down to Alabama to see friends that his wife has not seen since school.
Described as the biggest revolution in British personal finances in decades, the new pensions regime means anyone aged 55 or over can now cash in their defined contribution (aka money purchase) pension and spend it on a sports car, invest in a buy-to-let property, or put the money in the bank. Previously, people were forced to use most of the money to buy an annuity – the annual retirement income paid for the rest of their life. Described as the biggest revolution in British personal finances in decades, the new pensions regime means anyone aged 55 or over can now cash in their defined contribution (aka money purchase) pension and spend it on a sports car, invest in a buy-to-let property or put the money in the bank. Previously, people were forced to use most of the money to buy an annuity – the annual retirement income paid for the rest of their life.
Asked if having access to a lump sum could become problematic for some people, Gunn said: “If you are sensible enough to save into a pension then it is perfectly sensible that you be left to decide as and when to draw money from it.Asked if having access to a lump sum could become problematic for some people, Gunn said: “If you are sensible enough to save into a pension then it is perfectly sensible that you be left to decide as and when to draw money from it.
“At the end of the day people’s pension has to last a long time, so I think getting advice is absolutely crucial.” “A pension has to last a long time, so I think getting advice is absolutely crucial.”
He said the uncrystallised funds pension lump sum scheme provides a good vehicle to manage his pension money flexibly, although complained about its “cumbersome” name. “If they are trying to make pensions easy to understand why on Earth are they giving it a name like that? He said the uncrystallised funds pension lump sum scheme provided a good vehicle to manage his pension money flexibly, although he complained about its “cumbersome” name. “If they are trying to make pensions easy to understand why on Earth are they giving it a name like that?
“They could have just called it ‘undrawn pension’ or something like that.”“They could have just called it ‘undrawn pension’ or something like that.”
Jokes that roads would be congested with wealthy over-55s test-driving Lamborghinis as soon as they could cash in their pension pots have proved wide of the mark.Jokes that roads would be congested with wealthy over-55s test-driving Lamborghinis as soon as they could cash in their pension pots have proved wide of the mark.
Despite opening for the bank holiday, Lamborghini Sevenoaks had not experienced a rush of affluent Kent pensioners keen to splash out on a £185,000 Huracán or £270,000 Aventador.Despite opening for the bank holiday, Lamborghini Sevenoaks had not experienced a rush of affluent Kent pensioners keen to splash out on a £185,000 Huracán or £270,000 Aventador.
“The crowds seem to be controlling themselves,” joked showroom manager Edward Alexander.“The crowds seem to be controlling themselves,” joked showroom manager Edward Alexander.
The comment last year from pensions minister Steve Webb that people were quite free to invest their nest egg in one of the luxury sports cars has featured in almost every subsequent article about the radical pensions rule change.The comment last year from pensions minister Steve Webb that people were quite free to invest their nest egg in one of the luxury sports cars has featured in almost every subsequent article about the radical pensions rule change.
Alexander, however, was delighted by the minister’s namecheck for the Italian brand. “It’s been excellent publicity, and unprompted, as far as I know. There’s a financial planning consultancy in Sevenoaks who held an evening seminar about the [new pension] rules in our showroom a couple of weeks ago. They had about 40 guests here,” he said, adding: “None of them have turned round yet and said ‘we would love to buy [one]’.”Alexander, however, was delighted by the minister’s namecheck for the Italian brand. “It’s been excellent publicity, and unprompted, as far as I know. There’s a financial planning consultancy in Sevenoaks who held an evening seminar about the [new pension] rules in our showroom a couple of weeks ago. They had about 40 guests here,” he said, adding: “None of them have turned round yet and said ‘we would love to buy [one]’.”
During the last few days Webb has been keen to stress that there is “nothing magical” about the 6 April shake-up, and that for many people, the best advice is to wait and see what products become available. During the past few days, Webb has been keen to stress that there is “nothing magical” about the shakeup and thatthe best advice is to wait and see what products become available.
On BBC Radio 4’s Today programme on Monday he said 6 April was “a starting gun, not a deadline”, and rejected as “nonsense” suggestions that as many as 2 million people would be cashing in their retirement pots straightaway. Many over-55s would, he said, carry on working and saving for many years. On BBC Radio 4’s Today programme on Monday, he said 6 April was “a starting gun, not a deadline”, and rejected as “nonsense” suggestions that as many as 2 million people would be cashing in their retirement pots straight away. Many over-55s would, he said, carry on working and saving for many years.
If there are indeed many pensioners keen to splash out on a luxury sports car, most of them will probably have been restricted to window shopping, with Lamborghini Sevenoaks one of the relatively few dealerships open on 6 April. If there are indeed many pensioners keen to splash out on a luxury sports car, most of them will probably have been restricted to window shopping, with Lamborghini Sevenoaks one of the relatively few dealerships open on the bank holiday.
Hymans Robertson, a leading pensions consultancy, estimated that older people were set to withdraw £6bn from their pension pots within the first four months of the new rules taking effect.Hymans Robertson, a leading pensions consultancy, estimated that older people were set to withdraw £6bn from their pension pots within the first four months of the new rules taking effect.