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Pension pots being raided for luxury cars

Pensioners are throwing caution to the wind and spending their pension money on expensive new rides, it has been reported.

Finance company Magnitude Finance said it had witnessed an increase in the number of elderly people buying luxury cars in the wake of a rule change that allows those aged of 55 to withdraw all or part of their pension.

It mentioned one example in which one customer used money earned over his lifetime as a deposit on four vehicles, including a Bugatti EB 110 and a Jaguar XJ220. Just those two cars equalled £610,000 of the £875,000 total. 

Not only that, the same customer had another finance deal on a Ferrari 512M and a 430 Scudeira, totalling £430,000. 

Magnitude Finance said: “Then pensions minister, Steve Webb, famously said people could go out and buy cars like Lamborghinis once they cashed in their pensions under the new reforms and now some people are. 
 
“By cashing in his pension, this client has given the financial institutions lending the money assurance and that allowed him to leverage the lending. 
 
“The client is expecting his collection to appreciate in value at a greater level than his pension investment previously did.” 

The current low interest rate of 0.5 per cent is another factor in why pensioners are using their money for more extravagant four-wheeled purchases. Magnitude Finance specialises in finance on vehicles priced over £25,000.

Would you withdraw your money for a Ferrari? Let us know.

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