WE ALL dream of winning the lottery or finding ourselves in possession of a pot of gold, but for many UK residents above the age of 55, an unexpected windfall could be coming in the form of early access to their pension funds.
Changes to legislation this month mean that 18 million people will be able to dip into their pension savings as many times as they like, with up to 25 per cent tax free. Every year, a further 320,000 will become eligible.
So what do they plan to do with this extra income, which experts suggest could amount to a combined £6 billion spent in the first few months?
According to various surveys, a large number intend to spend it on a holiday.
Research by ABTA shows that 1 in 5 (20 per cent) of 55 to 75-year-olds would consider taking cash out of their pension, and of that amount, 35 per cent said they would consider spending it on a holiday or travel.
ABTA chief executive Mark Tanzer said: “We know that people often celebrate big occasions such as anniversaries, birthdays or retirement with a holiday, so it’s perhaps no surprise to see travel topping the list of items pensioners may spend some of their money on. Many pensioners also have the freedom to travel, often the kids have flown the nest, mortgage debts have reduced and they have more leisure time.”
Most people surveyed (six in 10) plan to take a holiday of a lifetime. For retirees who have more time at their disposal, options could include epic journeys such as the new USA in 88 days trip from Bon Voyage (bon-voyage.co.uk; 0800 316 0194 ). Clocking up a whopping 11,500 miles, the trip covers 35 or the 55 states and meets with US visa regulations allowing British visitors to stay in the country for a maximum 90 days. Prices start from £9,950pp (twin share) including flights from Heathrow, Manchester or Glasgow, fully-inclusive car hire and room-only hotels throughout.
A number of people also plan to spend their money on multi-generational holidays, itself a growing trend in the travel market. Scott Dunn (scottdunn.com; 020 8682 5080) offers the luxury tented camp Island Lodge on private island Bergholmen, close to Stockholm, which is ideal for big family groups. Glampers have access to a hot tub, secluded beaches and activities such as sea kayaking and sailing. A three-night stay costs from £1,995pp (based on a minimum of four people sharing) including full board accommodation, flights and private transfers.
Another option for those able to travel at short notice would be a visit to some of the destinations industry experts are urging us to "see now, before it’s too late". Top of that list is Cuba, an island on the verge of change as a result of recent eased travel restrictions for Americans.
Rickshaw Travel (rickshawtravel.co.uk; 01273 322 399) offers the 14-day Mi Casa Tu Casa tour visiting Havana, Trinidad and Varadero from £1,015pp including transfers and B&B accommodation.
With so many exotic options available, it really is too tempting not to spend the kids’ inheritance...
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