I keep hearing about people needing cash now, needing to purchase something now.. there is of course, if you are over 50 and have funds tied up in a pension scheme to which you no longer contribute, the option of Pension Release.
I have had many arguments in the past about instant gratification and all that. We live, no doubt in an increasingly consumerist society where most people are not happy to wait for anything. Previous generations used to save up for a holiday, save up for a car, or save up for a deposit on a flat, often making great sacrifices in order to do so. Nowadays we put it on a credit card, or, in the case of a mortgage, look for a 100% or even 110% loan to get us on our way.
These changes in spending patterns highlight a change in the psyche of the nation. There are several factors which have some to play in creating this environment :
- There has been an increasing dumbing down in the media, it would be impossible to argue that the quality of products has not diminished markedly over the last 20-30 years.
- American / Western Consumer Culture has had a large affect on the advertising culture in Great Britain, adverts per viewing time ratio has increased and upgrade culture is encouraged. Nowadays we are engendered with the illogical feeling that old is no good. We are so bombarded with out with the old and in with the new that we fall for this consumerist trick. Many people now look upon their High Quality (CRT) Televisions as if they are some sort of anachronism in the home, Surely you should have a LCD/ Plasma Screen? Why? Why also do we look upon an extravagantly purchased mobile phone as
- We have been ( though current economic climate may not support this for much longer) offered outstanding incentives to get into debt. The continual nationwide increase in house prices has put so many people into an apparently powerful financial situation that they have been able to borrow heavily on the equity and get into large debts. The offers of interest free credit cards has led more and more people into the buy now, pay later culture.
More recently the economy has been hit with some worrying trends. The US subprime market has taken a battering and there have been repercussions on this side of the Atlantic also. Interest rates have wavered, putting less disposable cash in the pocket of the average man or woman. There has been the spectacular crash of Northern Rock in the UK and incremental interest rates have been the norm throughout the last year. It is reported that many lenders are imposing far stricter criteria on any new loan applications and that credit card companies are even reducing some people’s credit limits.
It is not surprising, then, in this financial climate that many people are feeling the pinch and wanting to realise any assets available. For UK residents over the age of 50 there is the opportunity to release funds from private pension schemes – a process often referred to as Pension Release from unused pension schemes before the natural maturation date of the policy. If you are interested in pursuing this avenue it would always be recommended you speak to a FSA registered company like GroveFP who have a Pension Release website full of information and can help you come to an informed decision.
This pension unlocking may well reduce the total payable to the policy holder in the long run, but, in today’s society who cares, as long as you have the latest edition you are doing OK.