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Monday, April 06, 2015

Pensioners benefit from Liberal Democrats in Government

All the news about pensions today focusses on the new freedoms ushered in by Pensions Minister, Steve Webb. As the Telegraph reports more than half a million savers will make the pension reforms a success by prudently withdrawing small amounts to spend on holidays, home improvements and their grandchildren.

They say that the first detailed study into how savers will use the new freedoms indicates that fears of pensioners blowing their savings on fast cars or frivolities are unfounded as just one in 10 will withdraw their entire fund in the first year:

In the vast majority of cases, those who access their pensions will take out less than £20,000, according to the survey by YouGov and investment company Tilney Bestinvest.

Experts said the results showed most people would use the freedoms to secure a better quality of life in retirement.

Steve Webb, the pensions minister, said: “There is genuine excitement out there about the changes. I have encountered a lot of enthusiasm, people who are saying it will be life-changing, that they can pay off a mortgage or do something for a family member.”

Claims that people would waste their money were patronising, he said, pointing out that those likely to take advantage of the reforms were “prudent savers”.

The real boost however is the Liberal Democrats triple lock which guarantees that pensions will rise by whichever is the greater of average earnings, inflation or 2.5%. That means that as of today the state pension will go up by £2.85 and will have risen by £18.30 a week since 2010, or £950 a year.
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