The Motley Fool

Pensions Freedom Will Be A Free-For-All

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

From 6 April, pension savers will be set free. On that momentous day, the over-55s will finally be unchained from the obligation to buy an annuity  at retirement, and liberated to spend their pension pot on whatever they want.

The great liberator, Chancellor George Osborne, hopes they will shower him with gratitude at the polls in May.

One Killer Stock For The Cybersecurity Surge

Cybersecurity is surging, with experts predicting that the cybersecurity market will reach US$366 billion by 2028more than double what it is today!

And with that kind of growth, this North American company stands to be the biggest winner.

Because their patented “self-repairing” technology is changing the cybersecurity landscape as we know it…

We think it has the potential to become the next famous tech success story. In fact, we think it could become as big… or even BIGGER than Shopify.

Click here to see how you can uncover the name of this North American stock that’s taking over Silicon Valley, one device at a time…

But for many, any initial gratitude will soon turn sour.

Taxation Freedom

Hundreds of thousands are expected to use their new-found freedoms to extract cash from their pensions, but they will quickly discover that freedom comes at a price.

You won’t be surprised to discover that the taxman will be first to name his.

HM Revenue & Customs will expect a share of any cash withdrawal, in the form of income tax.

Although you can take the first 25% of any withdrawal free of tax, the remainder will be taxed at your personal rate.

This means up to 20%, 40% or 45% of the cash you take may be gone in a thrice.

Double Tax Trouble

Unsuspecting people who take out a large lump sum in any given tax year could find it pushes them into a higher tax bracket.

This means they will pay more income tax than if they had withdrawn the money as income, year after year, through an annuity.

Up to twice as much tax, if it pushes them from basic rate to higher rate tax.

Fraud Free-For-All

The taxman won’t be the only one making free with your money.

Crooks and conmen see pension freedom as a once-in-a-lifetime opportunity to relieve unsuspecting pensioners of their lifetime savings.

The fraudsters are already swarming, bombarding people with unwanted texts, emails and cold calls.

It won’t be long before the newspapers fill up with hard luck stories of people who lost their lifetime savings to dodgy scams dressed up as great investment opportunities.

They won’t be expressing their gratitude to George Osborne, either.

Freedom At A Price

Nor will pensioners who find their cash runs out halfway through retirement, either because they blew it too quickly, or lived longer than they expected.

People moan about annuities but at least the income is guaranteed to last for as long as you live, however long you live.

The Department for Work & Pensions has just made it clear that any money you take will affect your entitlement to future means-tested benefits. Thousands could end their days in poverty as a result.

First-time buyers will also lament pension freedoms when a wall of liberated cash hits the property market, as the over-55s pour into buy-to-let to fund their retirement.

Cry Freedom

There’s a reason why politicians stepped back from granting pensions freedom in the past. Soon we will have a practical illustration of why they were right to be so cautious.

One Killer Stock For The Cybersecurity Surge

Cybersecurity is surging, with experts predicting that the cybersecurity market will reach US$366 billion by 2028more than double what it is today!

And with that kind of growth, this North American company stands to be the biggest winner.

Because their patented “self-repairing” technology is changing the cybersecurity landscape as we know it…

We think it has the potential to become the next famous tech success story.

In fact, we think it could become as big… or even BIGGER than Shopify.

Click here to see how you can uncover the name of this North American stock that’s taking over Silicon Valley, one device at a time…

Our 6 'Best Buys Now' Shares

Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.

So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we're offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our 'no quibbles' 30-day subscription fee refund guarantee.

Simply click below to discover how you can take advantage of this.