Budget - pensions what to expect?
Discussion
What does everyone think the Boy George will do on pensions next week?
As the mansion tax seems to be getting ever less likely, then concerns are increasing that the Coalition will turn to another pensions raid to try and balance the books.
Personally, I can see him stopping the 50% rate relief on pension payments.
If he goes further and stops the 40% tax relief and / or stops the up to 25% tax free sum that can be taken from a pension upon retirement then not only will he finally and irrevocably finish the work that Gordon Brown did in screwing over the UK pension industry, but he will consign the Tories to losing the next election. Rightly so, I didn't vote this shower of tossers in and will never vote Cons again as long as I live.
Note, please do not turn this thread into yet another public sector vs private sector fest.
Nor a you baby boomers have nicked all our futures replay, that has also been done to death, as will anyone taking the thread onto such tacks.
So what is the feeling?
As the mansion tax seems to be getting ever less likely, then concerns are increasing that the Coalition will turn to another pensions raid to try and balance the books.
Personally, I can see him stopping the 50% rate relief on pension payments.
If he goes further and stops the 40% tax relief and / or stops the up to 25% tax free sum that can be taken from a pension upon retirement then not only will he finally and irrevocably finish the work that Gordon Brown did in screwing over the UK pension industry, but he will consign the Tories to losing the next election. Rightly so, I didn't vote this shower of tossers in and will never vote Cons again as long as I live.
Note, please do not turn this thread into yet another public sector vs private sector fest.
Nor a you baby boomers have nicked all our futures replay, that has also been done to death, as will anyone taking the thread onto such tacks.
So what is the feeling?
If you've worked hard and are now reaping the rewards the government is going to bend you over and redistribute your wealth because "it's fair". Doesn't matter what colour the tie these days they are all the same.
To specifically answer your question i think they will lower the amount you can save into your pension (tax fee) each year.
To specifically answer your question i think they will lower the amount you can save into your pension (tax fee) each year.
http://www.bbc.co.uk/news/uk-politics-17341046
"Top earner tax breaks 'must end'
Labour has urged the government to "reverse" cuts to child tax credits and working tax credits by cutting tax breaks on the pensions of Britain's highest earners. Shadow chancellor Ed Balls said tax relief on pensions of those earning more than £150,000 a year should be reduced from 50% to 26%"
......
"Labour leader Ed Miliband said Chancellor George Osborne had no "compelling vision" for creating growth"
Yeah good one Ed - Love your idea about taxing the growth creators out of the country, that's really going to help isn't it!
"Top earner tax breaks 'must end'
Labour has urged the government to "reverse" cuts to child tax credits and working tax credits by cutting tax breaks on the pensions of Britain's highest earners. Shadow chancellor Ed Balls said tax relief on pensions of those earning more than £150,000 a year should be reduced from 50% to 26%"
......
"Labour leader Ed Miliband said Chancellor George Osborne had no "compelling vision" for creating growth"
Yeah good one Ed - Love your idea about taxing the growth creators out of the country, that's really going to help isn't it!
Bandit said:
http://www.bbc.co.uk/news/uk-politics-17341046
"Top earner tax breaks 'must end'
Labour has urged the government to "reverse" cuts to child tax credits and working tax credits by cutting tax breaks on the pensions of Britain's highest earners. Shadow chancellor Ed Balls said tax relief on pensions of those earning more than £150,000 a year should be reduced from 50% to 26%"
He might as well say "Ban high earners from having a pension"."Top earner tax breaks 'must end'
Labour has urged the government to "reverse" cuts to child tax credits and working tax credits by cutting tax breaks on the pensions of Britain's highest earners. Shadow chancellor Ed Balls said tax relief on pensions of those earning more than £150,000 a year should be reduced from 50% to 26%"
He really has no principles at all. It isn't a tax break, it's the way pensions are intended to work. You pay tax when you receive the pension, not when you pay in. If you have receive a big pension when you retire, then you pay more tax, probably at the higher rate.
There is already an annual allowance and a lifetime allowance which limit the amount of tax relief anyway. It really should be left alone.
There will be unintended consequences.For example, it will become impossible to align the pension needs of a company's staff with that of it's executives, making executives less likely to prepare a good pension plan and increasing the overall costs for everyone.
F i F said:
Rightly so, I didn't vote this shower of tossers in and will never vote Cons again as long as I live.
The problem with that approach is it only leaves you able to vote for people worse than the tories, people who will never get elected or never to vote again. . . . . . I love how people hate the tories less than two years in power, hamstrung with coalition and the greatest world financial crisis ever for not immediately fixing 13 years of labour but hey-ho!
As for your questions, my sources suggest pensions will be given a wide berth this time round with a focus on growth and particularly not discouraging those who create growth but we'll all have to wait for the detail.
I'm a bit confused here, are you referring to contributions above the tax free allowance? I understood that currently you can make contributions of up to £50k per annum without incurring a tax charge, I take it that your concern is for annual contributions above that number? My broader concern is that the continual meddling with pension legislation has reduced investor confidence and made planning for retirement a bit of a lottery, especially when they play the retrospective card. I really think there is a good case for stopping any chancellor from interfering with pension arrangements, especially for for short-term gains.
Blue62 said:
I'm a bit confused here, are you referring to contributions above the tax free allowance? I understood that currently you can make contributions of up to £50k per annum without incurring a tax charge, I take it that your concern is for annual contributions above that number? My broader concern is that the continual meddling with pension legislation has reduced investor confidence and made planning for retirement a bit of a lottery, especially when they play the retrospective card. I really think there is a good case for stopping any chancellor from interfering with pension arrangements, especially for for short-term gains.
It's not contributions above the tax free allowance, it's more your second point, i.e. the constant meddling, especially if they play a retrospective card or short notice of changes. Planning is a nightmare now and if they do as Ed Balls wants and make short terms changes with little notice, ie stopping any tax relief on contributions above the 20% base rate, and tax at the relevant on any lump sum taken at date of retirement.
Not sure if he has come out and said the last one in public yet, but it is what he wants aiui from sources.
To my mind the coalition have come out and given the public sector an offer which means anyone within a certain number of years from retirement no changes. They should not then turn round and amend tax legislation without a similar degree of notice, but I have no faith in any of them.
Sorry FiF, I thought your original point was about contribution limits, but re-read your post. I can't see that there's any/many votes to be won if they scrap the 25% tex free lump sum, there's a lot of us baby boomers out there ready with pitchforks and I'm sure that it would be a massive gamble for the Tory's. The noises coming out of the pension industry at the moment suggest that there's serious concern about what they're going to do though and judging by the low level of responses to this thread, there may be enough ambivalence out there to encourage them to hammer pensions again. Is PH a genuine barometer of wider political opinion?
Blue62 said:
I can't see that there's any/many votes to be won if they scrap the 25% tex free lump sum, there's a lot of us baby boomers out there ready with pitchforks and I'm sure that it would be a massive gamble for the Tory's.
Governments upset older voters at their peril, because they are more likely to vote than any other demographic group. There are already a lot of "baby boomers" who have suddenly found that their pension age has gone up from 65 to 66 just before they get to 65, and any other "hammering" of these people would not do the tories' electoral chances much good come the next time ...
I'm just hoping they keep their eye off that ball anyway because I shall be one of the last to get a pension at 65 as things stand at present
Blue62 said:
The noises coming out of the pension industry at the moment suggest that there's serious concern about what they're going to do though
See above. Electability comes before policy for all parties Blue62 said:
Is PH a genuine barometer of wider political opinion?
Erm .... if it was, the last election result would have been:UKIP 400
Tory 233
Labour 2
Lib Dem 0
In fact, have one of these
According to a press report yesterday anybody with a private pension which started in 1988 or before should check their small print to see if there is a guaranteed annuity rate attached which could be twice what they'd get without the guarantee. This is from memory after reading a headline so needs triple checking.
turbobloke said:
According to a press report yesterday anybody with a private pension which started in 1988 or before should check their small print to see if there is a guaranteed annuity rate attached which could be twice what they'd get without the guarantee.
That's right.However, there's no escape from the financial services rip-off.
Pension companies saw this coming a long time ago and have slashed the investment returns to almost nothing. So the pensioner eventually gets a nice "percentage" but of an undersized "pot" which has been ravaged by lousy investment returns and high inflation.
So why not transfer out and pocket the guarantee? 99 times out of 100 the guarantee will only apply at normal retirement age (say 60) so you're going to get taken either way.
Ozzie Osmond said:
turbobloke said:
According to a press report yesterday anybody with a private pension which started in 1988 or before should check their small print to see if there is a guaranteed annuity rate attached which could be twice what they'd get without the guarantee.
That's right.However, there's no escape from the financial services rip-off.
Pension companies saw this coming a long time ago and have slashed the investment returns to almost nothing. So the pensioner eventually gets a nice "percentage" but of an undersized "pot" which has been ravaged by lousy investment returns and high inflation.
So why not transfer out and pocket the guarantee? 99 times out of 100 the guarantee will only apply at normal retirement age (say 60) so you're going to get taken either way.
The article correctly points out that many pre-1988 pension plans have guaranteed annuity rates. That won't be removed - it's guaranteed. Where you need to be careful, is if you transfer the pension pot elsewhere as you would usually lose that guarantee, or if you retire/vest your pension plan as you need to ensure those guarantees are honoured in the annuity.
Seek independent financial advice and you'll be okay, as the adviser would check those points. The financial services industry gets enough bad press without keyboard warriors blurting out their interpretation of a general and somewhat sensationalist press article.
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