Watch out for moving money goalposts on pensions and property

FROM age pensions to property finance to a new Prime Minister, here’s a look at why the finances of many of us are having the goalposts moved.

FOOTY finals are reaching their peak, and while our sporting stars face many challenges at this pointy end of the season, they don’t have to worry about the goalposts moving.

It’s a different story in the world of money, where moving goalposts has almost become a sport itself.

From pensions to property to a new Prime Minister, here’s a look at why many Aussies’ finances are in a state of flux.

AGE PENSION

THE CHANGES TO AGE PENSIONS IN FULL

a major change to the age pension occurs in January next year.

January 2017 is approaching fast, and that means more than 320,000 retirees are going to lose part or all of their age pension.

In June the Senate approved changes to the age pension assets test, which is estimated to save the Federal Government $2.4 billion, although the government estimates more than 170,000 pensioners with low or modest assets will receive an extra $30 a fortnight.

While there are winners and losers, the hardest hit are those who saved aggressively for their retirement, and are now losing a big chunk of the income they had expected. Some will consider spending a big chunk of their nest egg on an overseas holiday just to regain access to the pension.

PROPERTY FINANCE

Lenders have tightened the rules around how much people can borrow to buy property.

Most are also inflicting an interest rate rise on more than two million Australians with investment loans or interest-only loans, using the flimsy excuse that financial regulators want them to rein in investment lending.

There are other options to tighten investment lending but they don’t deliver profit increases like the across-the-board hit on new and existing borrowers has. It’s easier to handball costs on to customers if you can argue regulators gave you a green light.

PRIME MINISTER MALCOLM

New Prime Minister Malcolm Turnbull with his new women cabinet ministers, (front, L-R) Defence Minister Marise Payne, Minister for Health, Sussan Ley, Minister for Foreign Affairs, Julie Bishop, Minister for Small Business, Kelly O'Dwyer and Minister of Women, Michaelia Cash. Picture: AFP / Peter Parks

The biggest goalpost move came with Malcolm Turnbull taking Australia’s top job from Tony Abbott.

It probably means that all bets are off around some of Mr Abbott’s previous promises, such as refusing to change the rules around superannuation.

The overall view among investors is that the rise of Mr Turnbull should be good for business, given he’s a rich entrepreneur and is expected to better articulate the changes our economy needs to fire up again.

SUPERANNUATION

SUPERANNUATION IDEAS SPARK DEBATE

Former Prime Minister Tony Abbott promised not to change superannuation rules. Are all bets are off?

Moving goalposts in super are nothing new — governments on both sides have been doing it for decades.

At the moment there’s a big push by many industry experts to remove some super tax breaks that are mainly enjoyed by wealthy Australians. Labor has made reducing super incentives an election policy, The Abbott Government ruled out cuts, but the Turnbull Government has a chance to make changes without too much backlash.

There’s every chance that super will be a big focus in future Budgets, as it’s one of the few areas where billions of dollars of savings can be made if government choose to wind back some of the overly-generous tax breaks doled out in the 2000s.

While it may be frustrating to see the rules constantly changing, the key is keeping up with the game to make sure the financial effects on you are minimal.

Keep a close eye on news from Canberra and seek professional advice if you have any concerns. The strategies that a good financial planner can pass to you will more than offset the cost of their advice.