I’m flipping furious with the Pension Regulator’s insinuation that those helping the hard up to access their pension savings to pay “household bills” are scammers. Here is an extract from someone who provides guidance to the over 55s for a living. He sounds as upset as I am.
I wonder if people like Ros Altman have much if any contact with the poorer members of the public. In my work … I see a wonderful cross-section of society. There are all too many who aren’t working and may not have worked for some years because of their own health conditions or because they are caring for others. Some of their health conditions come from working in the many physical jobs we need in society. I suspect Ros has never done any of these jobs.
Others, through health, lack of education or abilities, are not able to get jobs on much more than minimum wage.
There is a substantial problem with people getting into debt. You might like to talk to Citizens Advice if you want some figures and descriptions of some circumstances, including errors by government departments.
The suggestion that people should max out their credit cards is particularly dangerous for them. Some people don’t have credit cards at all and poorer people are only likely to get ones with APRs of around 30% or more.
Their use may be acceptable for a problem that is guaranteed to be short-term, but it just a route to further debt in other circumstances. I get a few people who want to take pension money to pay off / pay down credit cards. This looks like a wise financial move. The APR on the credit cards will almost certainly be much higher than the likely growth rate of the funds in their pension pot.
Anyone who has been following Martin Lewis will know how much a threat the rise in the energy cap is going to be to poorer households. I repeat this IMF graph for the third time.
The Government have not intervened sufficiently to help , but now it seems determined to hinder, by driving people into debt and default rather than spend what they have saved.
And it should not be for the DWP to supress me from arguing against the early encashment of small pots by those heading for a pension credit claim. Andy Young, who was once GAD’s actuary for the DWP (as well as advising Ros Altmann and Steve Webb) has chosen to go public on this.
Needy people need to manage their entitlements to means tested benefits for the same reasons that the better off manage their tax – it is worth doing. And for needy people, essential. It should be a lot easier and clearer for them to manage.
— andrew young (@glesgabrighton) August 6, 2022
There are four investment pathways; let’s remind ourselves of them
Pathway one; for those so rich they can leave their pension pot as a bequest – wealth management
Pathway two; for those who want a pension and are risk averse – annuity purchase
Pathway three; for those who want flexible access to their pot – drawdown
Pathway four; for those who want (or need ) their money now – cash out.
IF pathway four is to be degraded to “scammers way” then I am out. I am off and away from the Pensions Regulator, from the Lords and Ladies and from all those who consider pensions too “precious” to be spent on household bills.