Since the £300,000 plus price tag for an Aventado is 10 times the typical UK pension fund, it suggests that not many will be able to do that. Of course, once higher rate tax is deducted from the encashment of the part of the fund is taxable, we are talking about a lot larger fund than £300,000.
However, there are now genuine concerns being raised that people will spend their pension funds as soon as they get access. In fact, it seems that Steven Webb’s tongue-in-cheek comments held some water. A recent survey by Liberty SIPP found that 20% of people that were eligible to cash in their pensions would actually spend the lot on a car!
Surely, this is worrying. If we look at the UK State Pension, the flat rate is £113.10 per week. If someone spends their additional pension savings ( while still working and receiving a wage prior to retirement ) , how are they going to survive with no pension savings and no income other than the State Pension when they actually retire?
With freedom comes responsibility. While many think the last Budget has done a lot to improve the choices at retirement, this does put the onus of responsibility more firmly on the shoulders of the individual.
I feel some are going to live to regret the day they accessed and spent their pension on a car.