Pension changes: 'I'll spend it how I like'

A middle-aged couple walk in the woods Retirees have had restrictions on drawing their pensions lifted

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Following the 2014 Budget, those reaching retirement age will now be entitled to draw their entire pension in one go if they wish, and would not be required to buy an annuity.

However, opponents of the changes fear some individuals may spend their retirement funds unwisely and in large amounts, and annuity providers have lost out, including Partnership Assurance Group, which saw shares initially fall 55% the morning after the budget.

BBC News website readers have expressed their expectations, hopes and concerns about what the changes will mean for them:

Paul Lester, Cambridge

Paul Lester

As a person on a modest final-salary pension and paying a small amount of tax, I am pleased with the increase in tax-free allowance. I have just retired.

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It's ridiculous to believe that people who have spent their lifetime saving for old age will then go on a binge and waste the lot”

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I still have some money-purchase pensions that I have not drawn as I cannot bring myself to give my lifetime savings to an insurance company which will sell me a 'competitive' annuity that takes 20 years to give me my own money back. By way of help, HMRC removes 20% income tax from the proceeds. I'm hoping to draw the money from these pensions.

The initial, tax-free amount will go into Isas and a few trackers, and hopefully I'll live on the income.

I am also thrilled that I may now be able to spend the money I have saved during a working lifetime in the way I would like to.

I think it's ridiculous to believe that people who have spent their lifetime saving for old age will then go on a binge and waste the lot. If they were that way inclined they would be unlikely to have saved up in the first place.

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Bob Tunstall, Leyburn, North Yorkshire

Bob Tunstall

I have been self-employed for nearly 40 years and hope to continue to be so for at least another 10. My plan is to continue in business until I want to retire. I'm entitled to draw my main pension and I've already started drawing annuities from two others.

During the early years, I was seduced by the prospect of an early and prosperous retirement based on the 'quotes' for robust growth and generous annuities available from an optimistic personal pension industry.

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I have had to accept an even more dramatic decline in my expectations of the pension industry's stewardship of my savings”

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As a consequence, I planned, worked hard and felt content with the role of proprietor.

However, during the past decade or so, I have had to accept an even more dramatic decline in my expectations of the pension industry's stewardship of my savings for retirement.

The chancellor has, despite some possible adverse tax consequences, redressed the situation for people such as me. We can look forward to repatriating our own capital to the benefit of our own businesses without the flawed intervention of banking and pension systems which are clearly still recovering from their mistakes in the past.

After years of disappointment in annuity rates on pension funds, it's the flexibility we're suddenly given that I find very appealing.

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David Haugton, Doncaster, South Yorkshire

David Haughton

I am in the process of setting up an enhanced annuity with Partnership and so I am concerned to see their shares fall 55%.

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If only we had had some warning of these pension changes I would have delayed setting up an annuity”

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I thought I'd tidy up as I'm 65 this year. I sat down with my finance manager to look at my Sipp and turn my cash lump sum into an annuity.

I'd just sent off the paperwork only to open the Times this morning and see the one company I had chosen has dropped 55% on the back of this.

If only we had had some warning of these pension changes I would have delayed setting up an annuity. Now I feel that my pension may be at risk.

My finance manager says I'm panicking too soon. He's tried to reassure me normality will resume and annuity will come through and continue to come through. The FSA would move the pension somewhere else if Partnership goes bust, but I don't know how much I'd lose.

Written by Richard Irvine-Brown

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