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The most wonderful time of the year?

  • By Jason Stockwell

As we gear up for the Christmas festivities, whilst Richard Harvey isn’t planning a spending frenzy himself, he worries about the consequences for others who might be tempted to splash the cash


Whether or not you agree with the words of Roy Wood and Wizard, and wish it “could be Christmas every day”, I’m guessing that even as I write this in November, you won’t fail to have already had your fill of such seasonal ditties. For those readers who might need this explaining, it’s one of those ear-worms your pub, supermarkets and local shops blast out at this time of year, along with Slade, Bing Crosby, Jona Lewie and every other recording artist who thought a Christmas song would do wonders for their bank balance).

Talking of bank balances, as if to prove that today’s younger generation can live up to their growing reputation for abstemious and sensible behaviour, it’s their elders who are raiding their savings with the same reckless enthusiasm they tackle the tin of Quality Street.

Think I’m gonna get myself happy

Those words were one thing coming from George Michael. However, talking of Georges, the Pensions Policy Institute (PPI) has reported that since George Osborne unshackled pensions three years ago, more than half of those with a pension pot have taken the lot. In one go.

The Pensions Policy Institute (PPI) has reported that since George Osborne unshackled pensions three years ago, more than half of those with a pension pot have taken the lot. In one go

The result, of course, is they faced a socking great tax bill. Sadly, many of those DIY investors who took that step failed to appreciate that this would happen (although, rather like health warnings on fag packets, surely there should have been some kind of red light, klaxon-blaring alarm before they drained the pot).

Maybe the government was being somewhat coy about tax penalties on total pension withdrawal. The PPI reckons that if that habit continues, tax revenues could increase by as much as £19.2 billion in the next decade. If that was in the small print of Spreadsheet Phil’s October Budget, I missed it.

Our house

Meanwhile, the Equity Release Council reports that homeowners aged 55 or over borrowed more than £11 million a day in the three months to the end of September.

Just think how much that could benefit their offspring, maybe giving them a first step onto the housing ladder or paying off their credit card bills. Oh look – a porker has just flown past my window.

Key Retirement says almost a third of those who took equity release immediately went onto MakeTheNeighboursJealous.com and booked themselves a splashy holiday, while almost two thirds spent some of the money doing up their own home.

Only a minority used it to pay university fees or fund a house deposit – presumably the others have a heartwarming policy of “stand on your own two feet, kid”.

Clients of professional advisers will hopefully have got their finances – and spending habits – a little better under control. However, there is a tendency for so many people to throw caution to the wind when it comes to spending their hard-earned cash at this time of year. It is always a concern and one which can have rather serious consequences over the longer term – but that’s a subject for another day.

Key Retirement says almost a third of those who took equity release immediately went onto MakeTheNeighboursJealous.com and booked themselves a splashy holiday, while almost two thirds spent some of the money doing up their own home

Waspi Way

Finally, I note that at the time of writing, a date still hasn’t been set for the High Court to consider a judicial review of the government’s much-vilified decision to delay State pensions for women.

The review is being sought by the 700,000-member Backto60 movement, and will be led by Michael Mansfield, the luxuriantly-coiffed civil rights barrister.

One can only wish them well. Which is a sentiment I echo for all readers of IFA Magazine. May you have a peaceful Christmas (no talking about Brexit over the family lunch) and a prosperous 2019 to you, your families and your clients.

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