Pension LTA under threat?
Discussion
anonymous said:
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I think the point being made is that more senior people in any high stress profession when they reach the 'fag end' of their working lives look more carefully at what is important to them and if there is insufficient motivation available will decline extra work.anonymous said:
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It's not tens of thousands in income if it's being confiscated punitively and/or giving rise to a loss in pension benefit which effectively cancels out a huge portion of the earning. Would you do £30k worth of extra shifts if half of it went in tax and you lost the other half in the tapering off of your annual allowance or the imposition of a tax charge, or would you optimise your hours to maximise the work/reward balance?In relation to the BMA paper posted above from last January, the government did at least raise the threshold income from 150 to 240k presumably in response to this. I hate the system but it's also a bit rich them calling for abolition of the LTA for NHS workers on defined benefit schemes whilst presumably happy for everyone else to get hit by it.
https://www.gov.uk/government/publications/pension...
theboss said:
In relation to the BMA paper posted above from last January, the government did at least raise the threshold income from 150 to 240k presumably in response to this. I hate the system but it's also a bit rich them calling for abolition of the LTA for NHS workers on defined benefit schemes whilst presumably happy for everyone else to get hit by it.
The BMA are calling for the AA to be scrapped for all DB schemes AND scrapping the LTA for DC schemesUnsurprisingly, their paper doesn't offer up the obvious solution of scrapping the DB scheme and moving to a DC scheme like almost all in the private sector have done over the past 15 years or so.
anonymous said:
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I wouldnt say rich more like hard working ordinary folk who have been successful now being screwed over by the government.Good luck to the tax payers wanting to see a Dr in a few years time, its all ready a massive problem and going to get a lot worse.
https://www.theguardian.com/society/2021/jun/23/nu...
But its ok good as Boris is going to add 6000 Drs to a declining overworked workforce.
jrock78 said:
I wouldnt say rich more like hard working ordinary folk who have been successful now being screwed over by the government.
Hardly. When these DB pension promises were made, no-one could have imagined how valuable they were going to end up being. It really is a lottery win and it's distorting NHS funding, decision making and so on.anonymous said:
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Maybe so, but in the reasonable world, why is there a cap at all?A cap on contributions I can appreciate, but if my fund performs well then why am I being penalised? Again, it would drive me to retire early.
Thankfully I’m out of the U.K. tax net, because 1m may sound a lot, but it will provide you with 35-40k a year. Pitchfork-wielding simpletons may be a bit green due to their poor planning, but 1m of hard-saved cash isn’t going to be funding the high life in retirement.
anonymous said:
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It's increasingly irrelevant anyway. Tapering means that those that have enough earnings to get within striking distance of the LTA can't contribute enough to get there. If you were only driven by tax, the optimal strategy would be to save outside the pension in the early years, then drop down in earnings but smash £40k p.a. into the pension for the last 20 years of work.
anonymous said:
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Passive aggressive? If you say so.No, the LTA applies to your pot size. If you and the government contribute 500k over your working life, but the pot breaches the LTA through reasonable investment performance, you’re penalised.
The growth of the investment doesn’t cost the government anything.
If you agree with that, despite the fact that and LTA-ish pot provides nothing more than a reasonable existence, then that’s up to you.
Dixy said:
After the last 18 months if you think Doctors are "ordinary folk" there is little hope.
18 months of NHS worship and pot bashing has really warped your sense of perspective. What fraction of senior consultants on £150k+ do you think are getting their hands dirty in ICUs? The anecdotes I heard from family members in hospitals last year was the opposite - they'd never known it so quiet.If the government wants to raise cash, then cutting the LTA makes sense - a lot of people won’t be able to avoid it, and there won’t be much political sympathy for “boo hoo people with loads of money have to pay more tax”.
Similarly they could slowly creep up the DB valuation multiple from 20x to 30-35x…it would bring a lot more pensions above the LTA, and it’s hard for a lot of individuals to avoid. Done slowly it could also go fairly un-noticed as it’s sufficiently esoteric not to attract mainstream attention.
Capping tax relief at 30% is a less good idea. The problem is the ticking time bomb created by a lot of “ordinary” people on “ordinary wages” not saving anywhere near enough for their retirement. The government should be increasing incentives for normal people to save for retirement…not reducing it for people on £50k.
If they were to make it a flat 30% relief (thus increasing the incentive for basic rate taxpayers) that would be a very different story.
Similarly they could slowly creep up the DB valuation multiple from 20x to 30-35x…it would bring a lot more pensions above the LTA, and it’s hard for a lot of individuals to avoid. Done slowly it could also go fairly un-noticed as it’s sufficiently esoteric not to attract mainstream attention.
Capping tax relief at 30% is a less good idea. The problem is the ticking time bomb created by a lot of “ordinary” people on “ordinary wages” not saving anywhere near enough for their retirement. The government should be increasing incentives for normal people to save for retirement…not reducing it for people on £50k.
If they were to make it a flat 30% relief (thus increasing the incentive for basic rate taxpayers) that would be a very different story.
NickCQ said:
Hardly. When these DB pension promises were made, no-one could have imagined how valuable they were going to end up being. It really is a lottery win and it's distorting NHS funding, decision making and so on.
A lottery win is luck for doing f*ck all. These guys spend years studying then starting as a junior Dr at the bottom working their way up the ladder for an awful employer in difficult conditions before finally becoming consultant. Yes the DB pensions are extremely good but IMO they have earnt it. If Drs were private no doubt they would earn considerably more.jrock78 said:
These guys spend years studying then starting as a junior Dr at the bottom working their way up the ladder for an awful employer in difficult conditions before finally becoming consultant. Yes the DB pensions are extremely good but IMO they have earnt it.
Junior doctors today do the same job (potentially worse) for much less money and no chance of a million quid pension pot at the end of it. They will also work more hours and more antisocial hours far longer into their career with a greater chance of being shunted around the country away from family and friends. I have huge sympathy for junior and mid-level NHS staff but relatively little for the top of the pile.NickCQ said:
Junior doctors today do the same job (potentially worse) for much less money and no chance of a million quid pension pot at the end of it. They will also work more hours and more antisocial hours far longer into their career with a greater chance of being shunted around the country away from family and friends. I have huge sympathy for junior and mid-level NHS staff but relatively little for the top of the pile.
As a current consultant I don’t agree with this at all.Todays junior doctors work far less hours than I did when I was junior doctor. We had almost zero senior support out of hours and were working circa 100hours/week. Current juniors are legally protected from working anything like that amount and are paid better than we were at the equivalent stage of training.
Training rotations are far better organised than they used to be. I moved house very 6 months for a different job in different parts of the country for many years.
I am still in at night very frequently as is my wife who is also a consultant. I can tell you getting up and racing in to an emergency doesn’t get any easier when you are the wrong side of 50!
It is right that things have changed. Patient care is so much better and work life balance is also much better.
I do agree that the pensions were better in the older schemes but we have all now moved over to a career average rather than final salary scheme so the gap is closing. I am expected to work until I am 67 in the current scheme.
I am very fortunate to do my job and I still enjoy coming to work most days, but the maths just don’t add up for us to do additional work. It is not being greedy, but why would I do an Additional weekend of working when I will take home virtually no additional money. Some close to a pension threshold will lose money by coming to work. I would rather spend time with my family.
Biglips said:
Todays junior doctors work far less hours than I did when I was junior doctor. We had almost zero senior support out of hours and were working circa 100hours/week. Current juniors are legally protected from working anything like that amount and are paid better than we were at the equivalent stage of training.
I sat through this argument at Christmas dinner a few years ago - on one side we had a consultant that started work in the mid 80s, on the other side a couple of hospital doctors in their early 30s.The consultant ended up saying, effectively, "the job's not what it used to be and I advised my kids not to go into medicine". You only need to look at the rates of mid/early career doctors emigrating to Aus/NZ or leaving medicine entirely, which was unheard of 20 years ago.
NickCQ said:
I sat through this argument at Christmas dinner a few years ago - on one side we had a consultant that started work in the mid 80s, on the other side a couple of hospital doctors in their early 30s.
The consultant ended up saying, effectively, "the job's not what it used to be and I advised my kids not to go into medicine". You only need to look at the rates of mid/early career doctors emigrating to Aus/NZ or leaving medicine entirely, which was unheard of 20 years ago.
My eldest is doing medicine. She has seen the reality and still wants to do it. LolThe consultant ended up saying, effectively, "the job's not what it used to be and I advised my kids not to go into medicine". You only need to look at the rates of mid/early career doctors emigrating to Aus/NZ or leaving medicine entirely, which was unheard of 20 years ago.
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