Rebecca Tarn, North East’s Leading Female Family Lawyer specialist of Major Family Law, specialist divorce and children solicitors comments there has been much publicity about the government’s radical pension reforms, which will come into force this April 2015 and one of the most talked about changes is the ability for anyone over the age of 55 to spend their pension nest-egg on whatever they wish.

But, there is a catch…

The Department of Work and Pensions has now confirmed that people who spend, transfer or give away their pension pot may lose the right to claim state benefits if they run out of cash and are found to have deliberately deprived themselves of their pension money.

People are therefore being warned that if they spend their pension funds on luxuries, such as a sports car or round the world cruise, then they cannot fall back on benefits.  They will still have their pension fund counted as a source of income when calculating whether they are eligible for benefits despite they may have spent it all.

It is important for anyone considering how to deal with their pension assets to take specialist advice.