Would you hand your pension pot to an estate agent

Wednesday, March 26, 2014 by Ed Mead


Unintended consequences. Life is full of them and last week’s sea change Budget is no different.


Playing with pensions has been a favourite pastime for Chancellors over many Parliaments and, ignoring the politics, a confusing subject for most mortals continues to confound and confuse in equal measure.


However, this Chancellor, again ignoring political polemic, has sought to clear a path through the miasma of bumf by giving those aged 55 and over (and that’s me next year) a simple option, take your money, pay the tax and do what you want with it.


Whilst this makes a lot of sense, i.e. not handing a suit in the City your pension pot and getting an income based on how well those same suits have been doing, it does seem likely though that with property’s apparent popularity those same pension pot holders could well be handing their cash to estate agents.


This is the biggest change I’ve seen in my working career and leads to an obvious conclusion and unintended consequence. If this starts happening in earnest is the Government really going to let people hand their pension pot to any old agent without taking steps to make sure they’re reputable and responsible?


Given property’s high profile and the obvious benefits of being able to pass on the capital asset producing the pension income to the next generation it would seem a certainty that there’s going to be a flow away from the insurance companies that have been providing the annuities, just look at their share prices, into those that manage property related assets, agents.


So with agents becoming guardians of people’s pensions, the questions are how to give your pot to. Will the Government decide they want to choose who can and can’t handle this, and if they do will regulation follow? Given the importance of the asset to the individual buying it I’d suggest it should.


This blog has also appeared on www.primeresi.com