New Year’s revolutions

LAST UPDATED: 25 Jan, 2015 @ 17:40
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New Year’s revolutions

THE year ahead looks to be an intriguing one full of political posturing as the UK prepares for the General Election in May.

Particularly interesting will be the impact (or not) of UKIP and whether no clear majority between Labour and the Conservatives is the outcome of the vote again. There is already speculation that there may even be two elections in 2015 if that situation arises.

For the average person, the trouble is that all we have to rely on is what the politicians say and, of course, there is always political spin and self interest at heart in their speeches.

One thing is for certain, the creedence given to the opinions voiced by UKIP has made the mainstream parties re-think some of their policies. Perhaps a ‘kick up the backside’ from UKIP will have done no harm?

When it comes to New Year’s resolutions, the only decision I made this year is not to make any. This time last year I predicted that 2014 would see the FTSE100 share index break it’s previous 1999 record, but I was proved wrong. The Dow Jones in the US did manage to break through, however, and remains strong into the New Year.

For those with pension funds, what we also know is that we have some revolutionary changes in pension legislation and new benefits on the horizon.

Simply put, the majority of people over the age of 55 will have full access to their pension funds after April and we have seen confirmation that the new rules will also be applicable to people who have transferred to QROPS.

It is fair to say, however, that it will be up to the QROPS provider and their jurisdiction to determine whether they wish to allow the new rules to apply.

Market pressure is likely to have an impact in that regard and time will tell how many people will exercise the option to take more from their pension funds than they were previously allowed to do.

The new rules do not apply to all UK pension schemes as the pension fund needs to be held in a defined contribution arrangement for the flexibility to apply and people with defined benefit/final salary pensions, they may not be able to transfer to an appropriate plan.

I see the new rules as a positive step as they will heighten awareness and will allow a far greater range of options when considering overall financial planning. However, with more options, the need for careful consideration and perhaps professional advice are more important than ever.

The Government has promised ‘free guidance’ for all, but this can only be generic in its nature – very different to receiving personal financial advice.

Happy New Year.

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