Increased lifetime allowance - would you work longer?
Poll: Increased lifetime allowance - would you work longer?
Total Members Polled: 179
Discussion
oddman said:
On the matter of LTA - it wouldn't influence me to continue working - once you're over the limit, most DB schemes including the NHS are so generous, a 25% haircut compares well with alternative investments.
AA on the other hand is an absolute crippler (I've had years where income tax an AA charges have been more than my total earnings so reduced size pension to pay the tax). Many consultants will have made changes to their job plans and cut their cloth to deal with successive years of £40k limit which they likely won't change because the limit has gone up to £60k.
The other limiter is loss of personal allowance. The consultants salary scale makes it quite difficult to 'punch through' this until you're quite senior or doing more than 40 regular hours a week (which previosly nobbled you for AA through taper). So for many, it's an additional factor which causes senior medics to limit hours.
I agree with all of this. I think the biggest problem with LTA is the recent labour statement that they would put it straight back, if in power. Which for me personally is like saying if you retire before the next labour government your pension per year would be about £3K per year better off.AA on the other hand is an absolute crippler (I've had years where income tax an AA charges have been more than my total earnings so reduced size pension to pay the tax). Many consultants will have made changes to their job plans and cut their cloth to deal with successive years of £40k limit which they likely won't change because the limit has gone up to £60k.
The other limiter is loss of personal allowance. The consultants salary scale makes it quite difficult to 'punch through' this until you're quite senior or doing more than 40 regular hours a week (which previosly nobbled you for AA through taper). So for many, it's an additional factor which causes senior medics to limit hours.
Truly madness to give a time limit on reversing it because it adds one more reason to retire and a time limit to make the decision in.
If LTA was left alone, either way, it wouldn't be a factor in the decision for me.
julian64 said:
oddman said:
On the matter of LTA - it wouldn't influence me to continue working - once you're over the limit, most DB schemes including the NHS are so generous, a 25% haircut compares well with alternative investments.
AA on the other hand is an absolute crippler (I've had years where income tax an AA charges have been more than my total earnings so reduced size pension to pay the tax). Many consultants will have made changes to their job plans and cut their cloth to deal with successive years of £40k limit which they likely won't change because the limit has gone up to £60k.
The other limiter is loss of personal allowance. The consultants salary scale makes it quite difficult to 'punch through' this until you're quite senior or doing more than 40 regular hours a week (which previosly nobbled you for AA through taper). So for many, it's an additional factor which causes senior medics to limit hours.
I agree with all of this. I think the biggest problem with LTA is the recent labour statement that they would put it straight back, if in power. Which for me personally is like saying if you retire before the next labour government your pension per year would be about £3K per year better off.AA on the other hand is an absolute crippler (I've had years where income tax an AA charges have been more than my total earnings so reduced size pension to pay the tax). Many consultants will have made changes to their job plans and cut their cloth to deal with successive years of £40k limit which they likely won't change because the limit has gone up to £60k.
The other limiter is loss of personal allowance. The consultants salary scale makes it quite difficult to 'punch through' this until you're quite senior or doing more than 40 regular hours a week (which previosly nobbled you for AA through taper). So for many, it's an additional factor which causes senior medics to limit hours.
Truly madness to give a time limit on reversing it because it adds one more reason to retire and a time limit to make the decision in.
If LTA was left alone, either way, it wouldn't be a factor in the decision for me.
Flooble said:
This is exactly what I was driving at - someone intelligent enough to be a Doctor, and altruistic enough to be a Doctor, is not (IMO) going to be swayed into slogging away for another ten years, with all the strain that it brings, in order to have one more cruise holiday a year. I strongly suspect that most are in the "I have enough to be comfortable, so I'd rather not continue working" camp.
Im all right jack, hardly aligns with altruistic however......djc206 said:
For any of the doctors or other senior NHS on here. Have many of you come out of the DB pension ie cashed out when CETV’s were crazy high pre Ukraine? Or is that not an option for the NHS pension?
From memory you could only transfer it to certain other DB schemes (e.g. LGPS). I don't think you can transfer to DC or SIPP.It would seem a no-brainer for the NHS to offer cash equivalent pensions for doctors above a certain threshold; so if you’re a senior doctor in danger of breaching AA (or previously the LTA) then you could take cash in lieu of pension.
You’d have thought the Treasury would be glad to have the income tax (as well as doctors working, obviously).
You’d have thought the Treasury would be glad to have the income tax (as well as doctors working, obviously).
Countdown said:
djc206 said:
For any of the doctors or other senior NHS on here. Have many of you come out of the DB pension ie cashed out when CETV’s were crazy high pre Ukraine? Or is that not an option for the NHS pension?
From memory you could only transfer it to certain other DB schemes (e.g. LGPS). I don't think you can transfer to DC or SIPP.bennno said:
Flooble said:
This is exactly what I was driving at - someone intelligent enough to be a Doctor, and altruistic enough to be a Doctor, is not (IMO) going to be swayed into slogging away for another ten years, with all the strain that it brings, in order to have one more cruise holiday a year. I strongly suspect that most are in the "I have enough to be comfortable, so I'd rather not continue working" camp.
Im all right jack, hardly aligns with altruistic however......Alternatively they could have gone straight into the City and started pulling megabucks.
Or at any point in their studies up to and after obtaining their GMC, gone into Pharma and pulled in megabucks.
The City (obvs) and Pharma both pay far more than the NHS.
oddman said:
On the matter of LTA - it wouldn't influence me to continue working - once you're over the limit, most DB schemes including the NHS are so generous, a 25% haircut compares well with alternative investments.
AA on the other hand is an absolute crippler (I've had years where income tax an AA charges have been more than my total earnings so reduced size pension to pay the tax). Many consultants will have made changes to their job plans and cut their cloth to deal with successive years of £40k limit which they likely won't change because the limit has gone up to £60k.
The other limiter is loss of personal allowance. The consultants salary scale makes it quite difficult to 'punch through' this until you're quite senior or doing more than 40 regular hours a week (which previosly nobbled you for AA through taper). So for many, it's an additional factor which causes senior medics to limit hours.
Whilst the BMA have applauded the budget changes, it falls of the approach they suggested some time ago which was that the AA should not apply DB schemes and the LTA shouldn't apply to pension pot (DC / SIPP) contributions.AA on the other hand is an absolute crippler (I've had years where income tax an AA charges have been more than my total earnings so reduced size pension to pay the tax). Many consultants will have made changes to their job plans and cut their cloth to deal with successive years of £40k limit which they likely won't change because the limit has gone up to £60k.
The other limiter is loss of personal allowance. The consultants salary scale makes it quite difficult to 'punch through' this until you're quite senior or doing more than 40 regular hours a week (which previosly nobbled you for AA through taper). So for many, it's an additional factor which causes senior medics to limit hours.
To me, scrapping the LTA seems more like a strategic political move along similar lines to Darling's 50p tax rate introduced in 2009, just before Labour lost power to the Tories. I just don't see the justification for removing it on the grounds of keeping NHS doctors in work.
LeoSayer said:
Whilst the BMA have applauded the budget changes, it falls of the approach they suggested some time ago which was that the AA should not apply DB schemes and the LTA shouldn't apply to pension pot (DC / SIPP) contributions.
To me, scrapping the LTA seems more like a strategic political move along similar lines to Darling's 50p tax rate introduced in 2009, just before Labour lost power to the Tories. I just don't see the justification for removing it on the grounds of keeping NHS doctors in work.
I agree - an excuse to give their rich mates even more cash using doctors as an excuse. If Labour are not clear what they will do post election, can see a flood of retirement for senior public sector workers who might get caught by reintroduction of LTA. Many of these are likely to return, but if they are pulling, £30-50k from their pensions, they are not going to do more than 3 days in the NHSTo me, scrapping the LTA seems more like a strategic political move along similar lines to Darling's 50p tax rate introduced in 2009, just before Labour lost power to the Tories. I just don't see the justification for removing it on the grounds of keeping NHS doctors in work.
If they really wanted us to work more/longer they would roll back the cliff edge taxes that punish work.
oddman said:
I agree - an excuse to give their rich mates even more cash using doctors as an excuse. If Labour are not clear what they will do post election, can see a flood of retirement for senior public sector workers who might get caught by reintroduction of LTA. Many of these are likely to return, but if they are pulling, £30-50k from their pensions, they are not going to do more than 3 days in the NHS
If they really wanted us to work more/longer they would roll back the cliff edge taxes that punish work.
Doing away with the loss of personal allowance and making £100k the threshold for 45% tax would surely have been the most effective move? The treasury is losing a lot of money to people dodging that band, ironically outside of the public sector people are loading up their pensions at that point. Combined with a sensible AA and LTA that labour couldn’t paint in such a negative way and they’d have been onto a winner.If they really wanted us to work more/longer they would roll back the cliff edge taxes that punish work.
Also why are pension pots protected from IHT in the way they are? Surely of all the things that we should be taxing when someone dies pensions are up there because they’ve enjoyed tax relief. My pension pot is just about the only thing I haven’t paid (much) tax on.
I think the easiest political answer would just be to say "Public Sector workers no longer pay tax"
Simplifies payroll; avoids having to constantly tweak taxation rules; side steps having to do any weird calculations (DB pension pot is nominally only 20x annual pension - lol) and gives them all a big salary boost.
Simplifies payroll; avoids having to constantly tweak taxation rules; side steps having to do any weird calculations (DB pension pot is nominally only 20x annual pension - lol) and gives them all a big salary boost.
oddman said:
I agree - an excuse to give their rich mates even more cash using doctors as an excuse. If Labour are not clear what they will do post election, can see a flood of retirement for senior public sector workers who might get caught by reintroduction of LTA. Many of these are likely to return, but if they are pulling, £30-50k from their pensions, they are not going to do more than 3 days in the NHS
If they really wanted us to work more/longer they would roll back the cliff edge taxes that punish work.
The rich avoid all measures of this manner and they will do forever more. Rich isn't anyone working PAYE and if they are they're tapered out. Nobody that is a mate of the tory party is worrying about anything as poxy as a pension allowance even if they could.If they really wanted us to work more/longer they would roll back the cliff edge taxes that punish work.
Flooble said:
I think the easiest political answer would just be to say "Public Sector workers no longer pay tax"
Simplifies payroll; avoids having to constantly tweak taxation rules; side steps having to do any weird calculations (DB pension pot is nominally only 20x annual pension - lol) and gives them all a big salary boost.
wow what a boost not paying income, value added, council, car, fuel taxes would give those individuals....Simplifies payroll; avoids having to constantly tweak taxation rules; side steps having to do any weird calculations (DB pension pot is nominally only 20x annual pension - lol) and gives them all a big salary boost.
djc206 said:
Also why are pension pots protected from IHT in the way they are? Surely of all the things that we should be taxing when someone dies pensions are up there because they’ve enjoyed tax relief. My pension pot is just about the only thing I haven’t paid (much) tax on.
My understanding is that pension assets are held outside your estate in a trust for the beneficiaries. The beneficiary is you if you are alive and if you are dead, it will be whoever you have nominated on your expression of wishes. The trustees make the final decision on who gets the pension based on your expression wishes, the scheme rules, any applicable legislation and any other factors.A pension pot can therefore be used in a similar way to life insurance which can also be written into trust thereby keeping the payment outside of your estate.
As a result, I expect it might be quite difficult to write legislation that brings pension assets into a deceased's estate.
LeoSayer said:
My understanding is that pension assets are held outside your estate in a trust for the beneficiaries. The beneficiary is you if you are alive and if you are dead, it will be whoever you have nominated on your expression of wishes. The trustees make the final decision on who gets the pension based on your expression wishes, the scheme rules, any applicable legislation and any other factors.
A pension pot can therefore be used in a similar way to life insurance which can also be written into trust thereby keeping the payment outside of your estate.
As a result, I expect it might be quite difficult to write legislation that brings pension assets into a deceased's estate.
Ah ok. Surely such a change isn’t beyond the wit of man. A pension pot can therefore be used in a similar way to life insurance which can also be written into trust thereby keeping the payment outside of your estate.
As a result, I expect it might be quite difficult to write legislation that brings pension assets into a deceased's estate.
TriumphStag3.0V8 said:
Kermit power said:
TriumphStag3.0V8 said:
Whilst I understand the sentiment among most people of "woah, (just over) a million pounds in a pension = rich b
d", and accepting that a lot of people will not get anywhere near that, it is not as much as the headline number makes you think.
Assuming that someone with a maxed-out pension pot buys an annuity with all of it, depending on the terms of the annuity (spouse/dependents pensions etc), then that would be between £30K and £40K a year of income, which of course would be taxed.
A comfortable amount to live on in retirement, absolutely - but hardly luxurious and lavish (I appreciate people's view on what is lavish is subjective).
I am probably going to hit the current threshold by the time I hit retirement age. From my perspective, it is about time high earners were not hammered at every opportunity, and this is a small step to giving something back to those that contribute the most.
Changing the topic slightly - there is clearly a lack of understanding amongst the general population as to how pensions work (including the state pension) - I really think that this is something that should be taught properly in schools, along with mortgages and taxation in general (far more useful that learning trigonometry). I have taken on younger staff in their 20's (educated, professional roles) who knew very little about, and had little interest in pensions, didn't understand mortgages etc (and were horrified by the concept of stamp duty).
Personally, I think EVERYONE should be horrified by the concept of Stamp Duty!d", and accepting that a lot of people will not get anywhere near that, it is not as much as the headline number makes you think. Assuming that someone with a maxed-out pension pot buys an annuity with all of it, depending on the terms of the annuity (spouse/dependents pensions etc), then that would be between £30K and £40K a year of income, which of course would be taxed.
A comfortable amount to live on in retirement, absolutely - but hardly luxurious and lavish (I appreciate people's view on what is lavish is subjective).
I am probably going to hit the current threshold by the time I hit retirement age. From my perspective, it is about time high earners were not hammered at every opportunity, and this is a small step to giving something back to those that contribute the most.
Changing the topic slightly - there is clearly a lack of understanding amongst the general population as to how pensions work (including the state pension) - I really think that this is something that should be taught properly in schools, along with mortgages and taxation in general (far more useful that learning trigonometry). I have taken on younger staff in their 20's (educated, professional roles) who knew very little about, and had little interest in pensions, didn't understand mortgages etc (and were horrified by the concept of stamp duty).
I'm in my fifties, and only in my second property.
Back when we bought our first, my expectation was that we'd do as my parents' generation and others before them had done and move to gradually larger houses over time, and a few years down the line, that's exactly what we did.
When the time came to move again, though, between all the various costs of moving, but above all stamp duty, we discovered that we'd be shelling out the best part of £40k before we'd spent so much as a penny on actually increasing the size of our house!
So what did we do? The same as almost every other homeowner in our street. We extended and converted the loft instead.
We got our extra space, but there is now a yawning chasm from the rung below on the ladder, so it's even harder than before for younger people to move on up.
Stamp Duty is evil.
That house now has a rear extension which was always sort of possible but made the house too big for the plot, and a loft conversion which, unless they've spent an absolute fortune dropping the height of the floors and ceilings internally, can't have more than about a 6' ceiling height in the loft itself, and must've turned one of the existing bedrooms from a double to a single to fit in the extra staircase!
LeoSayer said:
oddman said:
On the matter of LTA - it wouldn't influence me to continue working - once you're over the limit, most DB schemes including the NHS are so generous, a 25% haircut compares well with alternative investments.
AA on the other hand is an absolute crippler (I've had years where income tax an AA charges have been more than my total earnings so reduced size pension to pay the tax). Many consultants will have made changes to their job plans and cut their cloth to deal with successive years of £40k limit which they likely won't change because the limit has gone up to £60k.
The other limiter is loss of personal allowance. The consultants salary scale makes it quite difficult to 'punch through' this until you're quite senior or doing more than 40 regular hours a week (which previosly nobbled you for AA through taper). So for many, it's an additional factor which causes senior medics to limit hours.
Whilst the BMA have applauded the budget changes, it falls of the approach they suggested some time ago which was that the AA should not apply DB schemes and the LTA shouldn't apply to pension pot (DC / SIPP) contributions.AA on the other hand is an absolute crippler (I've had years where income tax an AA charges have been more than my total earnings so reduced size pension to pay the tax). Many consultants will have made changes to their job plans and cut their cloth to deal with successive years of £40k limit which they likely won't change because the limit has gone up to £60k.
The other limiter is loss of personal allowance. The consultants salary scale makes it quite difficult to 'punch through' this until you're quite senior or doing more than 40 regular hours a week (which previosly nobbled you for AA through taper). So for many, it's an additional factor which causes senior medics to limit hours.
To me, scrapping the LTA seems more like a strategic political move along similar lines to Darling's 50p tax rate introduced in 2009, just before Labour lost power to the Tories. I just don't see the justification for removing it on the grounds of keeping NHS doctors in work.
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