State pension age NOT rising yet

[Jockman]

Mr Dendrite said:

Wills2 said:

cb31 said:

alscar said:

I assume you are referring to this earlier this year ?
Personally I would doubt it but who knows but would agree if this happens difficult to see a riot.

IFS calls for government to scrap 25% tax-free lump sum

They better bloody not do, banking on that tax free lump sum.

Same here what are they playing at, are they trying to ruin people?

If I remember correctly the report did recommend it on a financial basis but recognised that it would not be politically expedient for any party. It also made the point that especially for lower tax paying income groups the tax free lump sum is a major incentive to save into a pension as otherwise the tax relief benefit is neutral. This of course ignores the benefit of any employer contributions.

As a thought, if the 25% tax free lump sum was scrapped and the higher rate tax relief was binned as some would like pension contributions would probably fall through the floor. That would have some interesting long term impacts to say the least!

The 3 main benefits I can see of paying in to pensions -

Personal Tax relief
Tax free lump sum
Inheritance tax exemption

Any attempt to mess with the TFLS would simply result in a huge withdrawal of millions of £s in a short period of time. Not sure that would be a positive move on the Govts part.

[monkfish1]

cb31 said:

Mr Dendrite said:

As a thought, if the 25% tax free lump sum was scrapped and the higher rate tax relief was binned as some would like pension contributions would probably fall through the floor. That would have some interesting long term impacts to say the least!

Absolutely, I certainly wouldn't bother and would just spend my earnings there and then. Why take the risk saving for a pension when you may never get to spend it? It's such a stupid idea you can imagine this or the next government going for it.

Sadly, in the end, this is where we wil end up. Labour have already signalled their intent to continue stealing, sorry, taxing pensions.

[monkfish1]

Jockman said:

Mr Dendrite said:

Wills2 said:

cb31 said:

alscar said:

I assume you are referring to this earlier this year ?
Personally I would doubt it but who knows but would agree if this happens difficult to see a riot.

IFS calls for government to scrap 25% tax-free lump sum

They better bloody not do, banking on that tax free lump sum.

Same here what are they playing at, are they trying to ruin people?

If I remember correctly the report did recommend it on a financial basis but recognised that it would not be politically expedient for any party. It also made the point that especially for lower tax paying income groups the tax free lump sum is a major incentive to save into a pension as otherwise the tax relief benefit is neutral. This of course ignores the benefit of any employer contributions.

As a thought, if the 25% tax free lump sum was scrapped and the higher rate tax relief was binned as some would like pension contributions would probably fall through the floor. That would have some interesting long term impacts to say the least!

The 3 main benefits I can see of paying in to pensions -

Personal Tax relief
Tax free lump sum
Inheritance tax exemption

Any attempt to mess with the TFLS would simply result in a huge withdrawal of millions of £s in a short period of time. Not sure that would be a positive move on the Govts part.

Id bet good money they will do it in the next few years.

The consequences dont matter. Tax £ now from the "rich".

[Macron]

I haven't seen much mainstream reporting on what was said today so here's a Mail link, sorry, the report suggests some grim increases, and proposes some interesting metrics: 6% of GDP on state would imply a means test/ when the money is gone it's gone.

I still can work out if this means they have dropped the rise in the near term, electioneering suggests they will, but what comes back might be a real kicker if this is adopted...

https://www.dailymail.co.uk/news/article-11919999/...

[Prolex-UK]

Blackpuddin said:

James6112 said:

mjb1 said:

There is talk of abolishing the 25% tax free lump sum. Won't be popular, but probably less likely to incite riots?

I’d better get in quick !

I blew mine years ago so I am all in favour of this progressive move.

The 25% bit and ability to buy your own annuity were cracking ideas.

Hope they leave well alone.

Not us oldies stopping working that is the issue

Tis the exit of workers due to the B word

[JagLover]

Panamax said:

Mr Dendrite said:

if the 25% tax free lump sum was scrapped and the higher rate tax relief was binned...

Who, over the age of 25, is going to vote for the party which does that?

The tax free amount has been frozen and will likely stay that way. Inflation will then do the job over the decades until the tax free amount gets you a good pub meal.

[Electro1980]

Macron said:

I haven't seen much mainstream reporting on what was said today so here's a Mail link, sorry, the report suggests some grim increases, and proposes some interesting metrics: 6% of GDP on state would imply a means test/ when the money is gone it's gone.

I still can work out if this means they have dropped the rise in the near term, electioneering suggests they will, but what comes back might be a real kicker if this is adopted...

https://www.dailymail.co.uk/news/article-11919999/...

But got to keep the triple lock!

It wouldn’t be so bad if private pensions were not linked to the state pension age.

[alscar]

Electro1980 said:

It wouldn’t be so bad if private pensions were not linked to the state pension age.

I'm probably being dense so apologies but how are they linked now ?

[croyde]

I keep reading about 66 being increased to 68, but now not.

How come mine is 67 then?

[Macron]

alscar said:

I'm probably being dense so apologies but how are they linked now ?

“ The government has confirmed plans to increase the minimum age you can access your pension from 55 – to 57 from 2028. From then on, the minimum pension age will remain ten years below State Pension age.”

https://www.moneyhelper.org.uk/en/pensions-and-ret...

[alscar]

croyde said:

I keep reading about 66 being increased to 68, but now not.

How come mine is 67 then?

All depends on your dob - mine is 67 as is my wife's.

[alscar]

Macron said:

“ The government has confirmed plans to increase the minimum age you can access your pension from 55 – to 57 from 2028. From then on, the minimum pension age will remain ten years below State Pension age.”

https://www.moneyhelper.org.uk/en/pensions-and-ret...

Thanks.

[TwigtheWonderkid]

alscar said:

Electro1980 said:

It wouldn’t be so bad if private pensions were not linked to the state pension age.

I'm probably being dense so apologies but how are they linked now ?

At the moment there's a 12 year gap, you can take your private pension at 55 even thought you don't get SP until 67. In 2028, that rises to 57, to make a 10 year gap, eventually 11 years as SP will rise to 68.

They don't want people being able to access their PP 15 or 20 years before SP. Because they don't want a workforce shortage and they don't want people running out of money and being more reliant on the state.

They have enough trouble with the existing gap, and about 700K people have quit work since the pandemic, most of those well under SP age. I'm one of them.

[Electro1980]

alscar said:

Electro1980 said:

It wouldn’t be so bad if private pensions were not linked to the state pension age.

I'm probably being dense so apologies but how are they linked now ?

I believe technically the national minimum pension age and the state pension age are not linked, but the government has historically kept them linked and been clear that they plan it in future. Technically they could change that, but given the political impact of that (helping wealthy pensioners, large, influential, companies wanting to reduce their pension liability etc.) it seems unlikely.

Again, it feels like younger workers are having to work longer and pay more tax to support the current pensioners who didn’t pay in enough. We are having to pay enough to cover our pensions and those of people already retired. That absolutely is the case with many DB pensions.

Edited by Electro1980 on Friday 31st March 10:25

[croyde]

alscar said:

croyde said:

I keep reading about 66 being increased to 68, but now not.

How come mine is 67 then?

All depends on your dob - mine is 67 as is my wife's.

Damn! I was looking forward to being really poor a year earlier

[Electro1980]

TwigtheWonderkid said:

alscar said:

Electro1980 said:

It wouldn’t be so bad if private pensions were not linked to the state pension age.

I'm probably being dense so apologies but how are they linked now ?

At the moment there's a 12 year gap, you can take your private pension at 55 even thought you don't get SP until 67. In 2028, that rises to 57, to make a 10 year gap, eventually 11 years as SP will rise to 68.

They don't want people being able to access their PP 15 or 20 years before SP. Because they don't want a workforce shortage and they don't want people running out of money and being more reliant on the state.

They have enough trouble with the existing gap, and about 700K people have quit work since the pandemic, most of those well under SP age. I'm one of them.

That too, although I suspect they will find that doesn’t work that well. The further away they more it the more professionals and middle and senior management types will stop planning towards a date and start planning towards “what is the minimum I need to stop doing this crap”.

I foresee a lot of xlennials in 20 years paying off their mortgage, downsizing to a 2 bed and taking up part time, low stress jobs to pay for the basics, whilst “living their best life YOLO” on their savings and seeing theirs pension as a second retirement.

I quite fancy giving up the crap I have to deal with at work, once I no longer have to pay mortgage and kids, and working 2-3 days a week doing Waitrose deliveries or driving for BCA etc, spending the rest of the time messing about with old motorbikes and cycling.

[SunsetZed]

Jockman said:

Mr Dendrite said:

Wills2 said:

cb31 said:

alscar said:

I assume you are referring to this earlier this year ?
Personally I would doubt it but who knows but would agree if this happens difficult to see a riot.

IFS calls for government to scrap 25% tax-free lump sum

They better bloody not do, banking on that tax free lump sum.

Same here what are they playing at, are they trying to ruin people?

If I remember correctly the report did recommend it on a financial basis but recognised that it would not be politically expedient for any party. It also made the point that especially for lower tax paying income groups the tax free lump sum is a major incentive to save into a pension as otherwise the tax relief benefit is neutral. This of course ignores the benefit of any employer contributions.

As a thought, if the 25% tax free lump sum was scrapped and the higher rate tax relief was binned as some would like pension contributions would probably fall through the floor. That would have some interesting long term impacts to say the least!

The 3 main benefits I can see of paying in to pensions -

Personal Tax relief
Tax free lump sum
Inheritance tax exemption

Any attempt to mess with the TFLS would simply result in a huge withdrawal of millions of £s in a short period of time. Not sure that would be a positive move on the Govts part.

Another large benefit is reducing your income to a lower tax band, particularly in the case of 100k to avoid the 62% tax bracket from 100k-125k with the removal of the personal allowance. If they want people to spend more money they should sort this. I know that it's a first world problem but currently 4% of the working population are impacted by this and I bet that many of them are pumping higher contributions into their pension than they otherwise would to avoid the tax hit thus meaning that when they reach early 50's their pension pot is a lot bigger than it would have been and enabling more early retirements which they're trying to avoid.

Edited by SunsetZed on Friday 31st March 12:48

[The Ferret]

SunsetZed said:

Another large benefit is reducing your income to a lower tax band, particularly in the case of 100k to avoid the 62% tax bracket from 100k-125k with the removal of the personal allowance. If they want people to spend more money they should sort this . I know that it's a first world problem but currently 4% of the working population are impacted by this and I bet that many of them are pumping higher contributions into their pension than they otherwise would to avoid the tax hit thus meaning that when they reach early 50's their pension pot is a lot bigger than it would have been and enabling more early retirements which they're trying to avoid.

Edited by SunsetZed on Friday 31st March 12:48

I've been saying this for years. It's a complete farce, they say 4% of the working population are impacted by this, but they have no clue as these are just the 4% that are taking it on the chin and paying 62%. The amount of earners doing what they can avoid it is unknown, but my guess is its substantial. It reaches way further than the £100k-£125k bracket too, as you have to earn substantially past £125k to make it worth taking under PAYE. I'd say anyone earning £100k-£140k is foolish for allowing their earnings to go above £100k.

All that tax being avoided, and again all the tax that would be earned when the money is spent, its a complete joke. Not to mention its a royal pi55take theiving nearly two thirds of someones pay.

[Murph7355]

Electro1980 said:

But got to keep the triple lock!
... .

It's sadly another of those policy areas where no matter which crock of st you vote for, it will be retained.

It's a joke - and the chart at the link provided shows why.

[crankedup5]

Electro1980 said:

TwigtheWonderkid said:

alscar said:

Electro1980 said:

It wouldn’t be so bad if private pensions were not linked to the state pension age.

I'm probably being dense so apologies but how are they linked now ?

At the moment there's a 12 year gap, you can take your private pension at 55 even thought you don't get SP until 67. In 2028, that rises to 57, to make a 10 year gap, eventually 11 years as SP will rise to 68.

They don't want people being able to access their PP 15 or 20 years before SP. Because they don't want a workforce shortage and they don't want people running out of money and being more reliant on the state.

They have enough trouble with the existing gap, and about 700K people have quit work since the pandemic, most of those well under SP age. I'm one of them.

That too, although I suspect they will find that doesn’t work that well. The further away they more it the more professionals and middle and senior management types will stop planning towards a date and start planning towards “what is the minimum I need to stop doing this crap”.

I foresee a lot of xlennials in 20 years paying off their mortgage, downsizing to a 2 bed and taking up part time, low stress jobs to pay for the basics, whilst “living their best life YOLO” on their savings and seeing theirs pension as a second retirement.

I quite fancy giving up the crap I have to deal with at work, once I no longer have to pay mortgage and kids, and working 2-3 days a week doing Waitrose deliveries or driving for BCA etc, spending the rest of the time messing about with old motorbikes and cycling.

Isn’t that exactly what has happened/is happening since covid, those workers aged 50+ have just not gone back to work. Peed off with the crap that work has become?