On April 6th 2015, everyone with a draw-down pension will be able to turn it into cash – and/or do a lot more things with it as a pension. Doesn’t that sound exciting?
Just as with Help to Buy, the minute Osborne announced this scam I was in grudging awe of the man’s skill when it comes to underwater three-dimensional Chess moves. He may have 100% of all the wrong ends, but he does have 250% of the right means to achieve said ends.
1. As one of the architects of Zirp, The Draper knows perfectly well that all those at the lower end of retirement capital assets have been pauperised by it. So he has a group of cash-strapped folks likely to grab the cash as the drowning man gropes for the straw.
However, there will be tax to pay on that conversion from protected pension to exposed cash….and a 55% tax charge on any cash residue eventually Willed to others.
2. Also on April 6th, any and all limits on one’s ability to take income from the pension will be abolished. Little Osborne is also fully aware of why capped draw-down income came about: because relatively unsophisticated citizens are likely to spend more than they can afford to – having been schooled in the credit mantra of neoliberal economics – and this one day fall back onto the mercy of a bankrupt State.
So if you decide to blow it all over the following two years, you will pay income tax on that ‘salary’ at the highest rate.
3. Unfortunately, at the last Budget Osborne quietly abolished ‘National Insurance’…and all the citizen support for which the State was liable under the original National Insurance Act of ????.
On introducing these deregulatory ‘reforms’, the Chancellor insisted that his sole motivation was “to give ordinary people the freedom to manage their own affairs”.
Is there really anyone out there who thinks George Osborne’s life in politics has been devoted to the support of ordinary people?
The dual motivation of this unpleasant little pipsqueak is as follows:
i. To present this cynical fund-release as an example of how Conservative Policy makes us all ‘richer’….just one month and four days before the next General Election.
ii. To massively increase the Treasury’s short-term tax income at the expense of the naive poor.
Having blown their last safety net, however, those naifs will discover that the corporate fascist State cares not a jot for those left in hopeless hardship.
Anyone heard Ed Miliband speaking about this? Anyone remember him opposing it on the above grounds? Anyone recall a Militweet on the subject?
There is no real Opposition in the United Kingdom. That is the greatest threat we face to citizen liberty.