Her solution? Giving former public sector workers with less than two years of established pension rights the ability to immediately access 75% of their fund as a lump-sum.
She further suggested a staggered expansion of the proposed scheme. If the initial programme proved successful, it could be extended to those who had four years of service, then six years, and then eight years, finishing at ten years by the end of the Parliament.
Ms Thornberry stated that the scheme should be tax-neutral and provide no tax advantage. She acknowledged that although it would prove relatively costly in the short-term, it would make economic sense in the long-run.
Such a scheme may make economic sense for a future government, but if it were to be taken up, recipients of the potentially only small to medium pension pots would need pensions advice in order to make the right choices in respect of their savings.
There is an obvious danger that offering lump sum payouts may see that money removed from individual retirement strategies and this could deplete retirement income in the future.
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Blacktower Financial Management has more than three decades of experiencing helping its clients reach their retirement financial goals. This includes ensuring that their pensions are suitably aligned with their circumstances and objectives.
Whether you need guidance on consolidating several small pension pots, transferring a defined benefit pension or if you just want to review your options, we can help.
Our bi-lingual independent financial advisers work from offices across the UK and Europe providing local knowledge and industry expertise for cross-border pension and retirement concerns. Contact us today for more information.
* https://www.politicshome.com/news/uk/political-parties/labour-party/opinion/house-commons/109907/emily-thornberry-mp-government Accessed 21-02-20
This communication is for informational purposes only and is not intended to constitute, and should not be construed as, investment advice, investment recommendations or investment research. You should seek advice from a professional adviser before embarking on any financial planning activity. Whilst every effort has been made to ensure the information contained in this communication is correct, we are not responsible for any errors or omissions.
Over the years, the trend for South African nationals to seek out new lives and experiences in Portugal has continued to grow and grow; I myself made the move back in 1988 as a fresh-faced economics graduate from Witswatersrand University in Johannesburg, and I’ve never looked back. It’s easy to see the appeal for South Africans – the year-round sunshine and vast expanses of Atlantic coastline are a familiar part of daily life, just as they are back home – but the secure location and easy access to the rest of Europe is something really special. Being as there’s over 11,000 KM of distance between the two countries, a mere 12 hrs by plane give or take, there are going to be some big differences in the way of life, even if there are those obvious similarities. It’s probably advisable for any emigrant to arrive armed with a willingness to accept how things are done in their new home country rather than try to carry on as before and hope for the best. This is never more true than when dealing with your finances.