State Pension - what could happen to it?
Discussion
Mr Whippy said:
Am I right in reading that Hunt is pondering the removal of trust/beneficiary umbrella for DC pension pots?
So basically taking away the pension’s IHT free wrapper element?
Sounds fair enough to me… having tax relief on the way in, and then using it as a tax avoidance wrapper on the way out (it’d be otherwise accordingly taxed on the way out as a pension remember) seems a bit dodgy to me any way…
Make it apply to estate value and it only impacts large estates, so would only capture those using it as an IHT avoidance mechanism.
What do you define as large? My DC pension pot (in drawdown) isn’t an IHT avoidance mechanism, it’s my income for the rest of my life (and my wife’s after I do die). If I die after age 75 it’s taxed (income) anyway.So basically taking away the pension’s IHT free wrapper element?
Sounds fair enough to me… having tax relief on the way in, and then using it as a tax avoidance wrapper on the way out (it’d be otherwise accordingly taxed on the way out as a pension remember) seems a bit dodgy to me any way…
Make it apply to estate value and it only impacts large estates, so would only capture those using it as an IHT avoidance mechanism.
supersport said:
I just worked bloody hard and will retire in a year or so. I object to be told I had it easy, I didn’t and wasn’t given it on a plate. I also paid a f
k load of tax.
I have no sense of guilt of getting a little back in the form of a pension, eventually.
Conversely, since leaving school at 16 and starting work, I have spent those 35yrs mastering the art of how to do my work whilst putting in the least effort possible, but without it being noticed, and feel I have become quite an expert at it. k load of tax. I have no sense of guilt of getting a little back in the form of a pension, eventually.
I've made my work easy, but whilst making others perceive I'm working hard. There's a skill to doing that, a skill that I have never received any recognition for
. It first requires you to spend time learning the job inside out, and back to front, then figuring out how that work can be done with the least effort but with same results but without being discovered. When I retire in about 3yrs I'm thinking of becoming an 'easy life coach' 
Edited by The Gauge on Saturday 18th November 20:15
The Gauge said:
Conversely, since leaving school at 16 and starting work, I have spent those 35yrs mastering the art of how to do my work whilst putting in the least effort possible, but without it being noticed, and feel I have become quite an expert at it.
I've made my work easy, but whilst making others perceive I'm working hard. There's a skill to doing that, a skill that I have never received any recognition for . It first requires you to spend time learning the job inside out, and back to front, then figuring out how that work can be done with the least effort but with same results but without being discovered. When I retire in about 3yrs I'm thinking of becoming an 'easy life coach'
Wait are you me? I doubt it as I made CTO and was offered CEO and said no thanks.I've made my work easy, but whilst making others perceive I'm working hard. There's a skill to doing that, a skill that I have never received any recognition for
. It first requires you to spend time learning the job inside out, and back to front, then figuring out how that work can be done with the least effort but with same results but without being discovered. When I retire in about 3yrs I'm thinking of becoming an 'easy life coach' Edited by The Gauge on Saturday 18th November 20:15
I’ve a certain level of respect for skivers that get the job done. Lazy people always find simpler solutions. It’s a good characteristic.
cheesejunkie said:
Wait are you me? I doubt it as I made CTO and was offered CEO and said no thanks.
I’ve a certain level of respect for skivers that get the job done. Lazy people always find simpler solutions. It’s a good characteristic.
On a few occasions over the past 20 years, when asked by the CEO how long it would take to provide the requested information/report/data/etc, my reply was “In 2-3 hours… of course, I could give it to you in an hour, but then you wouldn’t be aware of how difficult it was.”I’ve a certain level of respect for skivers that get the job done. Lazy people always find simpler solutions. It’s a good characteristic.
Michael_B said:
cheesejunkie said:
Wait are you me? I doubt it as I made CTO and was offered CEO and said no thanks.
I’ve a certain level of respect for skivers that get the job done. Lazy people always find simpler solutions. It’s a good characteristic.
On a few occasions over the past 20 years, when asked by the CEO how long it would take to provide the requested information/report/data/etc, my reply was “In 2-3 hours… of course, I could give it to you in an hour, but then you wouldn’t be aware of how difficult it was.”I’ve a certain level of respect for skivers that get the job done. Lazy people always find simpler solutions. It’s a good characteristic.
Another one, when I was more junior and the operations manager was pestering me to reduce the time on a project. He asked that if he doubled the team size what’s my new estimate. I doubled my estimate. When questioned I explained that we’re tight for time and that we’d have to waste time training the new ones. Sorry for the thread divert.
craig1912 said:
Mr Whippy said:
Am I right in reading that Hunt is pondering the removal of trust/beneficiary umbrella for DC pension pots?
So basically taking away the pension’s IHT free wrapper element?
Sounds fair enough to me… having tax relief on the way in, and then using it as a tax avoidance wrapper on the way out (it’d be otherwise accordingly taxed on the way out as a pension remember) seems a bit dodgy to me any way…
Make it apply to estate value and it only impacts large estates, so would only capture those using it as an IHT avoidance mechanism.
What do you define as large? My DC pension pot (in drawdown) isn’t an IHT avoidance mechanism, it’s my income for the rest of my life (and my wife’s after I do die). If I die after age 75 it’s taxed (income) anyway.So basically taking away the pension’s IHT free wrapper element?
Sounds fair enough to me… having tax relief on the way in, and then using it as a tax avoidance wrapper on the way out (it’d be otherwise accordingly taxed on the way out as a pension remember) seems a bit dodgy to me any way…
Make it apply to estate value and it only impacts large estates, so would only capture those using it as an IHT avoidance mechanism.
It could get whole 40pc IHT taxed, it won’t matter as you’ll be dead.
If you do actually care that it has IHT sheltering potential, then having it covered up to say the IHT free amount would seem reasonable surely?
After-all beneficiaries still get 60pc of it, it’s not like it all goes.
And Jeremy seems to want to reduce IHT in return for giving it a bit more exposure.
Ie, pensions are hit if they turn into inheritance, but at a lower level… so probably balances out for people who’d care any way… (sans the inflationary creep on fixed thresholds which is what their strategy seems to be)
911hope said:
There is talk of Hunt shaving the benefits of triple lock, to fund inheritance tax cuts, which benefit the top 5%.
What happened to leveling up?
What happened to leveling up?
https://www.ft.com/content/7a1d657a-c7d4-47b1-8bc9...
The triple lock safeguards a minimal but useful level of retirement income for those who qualify. This is a vox pop article on it
Puzzles said:
I agree they had better pensions, cheaper housing, less competition for jobs, better social mobility, retired earlier, free university, North Sea oil, fewer speed camera, shorter waiting times for the nhs, post war investment, council houses.
What was my point again, ah yes but they didn’t have iPhones.
Well if they gave up their iPhones and take away coffees, they could buy the family home in London they claim they can't afford What was my point again, ah yes but they didn’t have iPhones.
Michael_B said:
On a few occasions over the past 20 years, when asked by the CEO how long it would take to provide the requested information/report/data/etc, my reply was “In 2-3 hours… of course, I could give it to you in an hour, but then you wouldn’t be aware of how difficult it was.”
Should have said 5hrs, then handed it to him at 3hrs to impress them further 
Mr Whippy said:
Well it’s irrelevant then isn’t it?
It could get whole 40pc IHT taxed, it won’t matter as you’ll be dead.
If you do actually care that it has IHT sheltering potential, then having it covered up to say the IHT free amount would seem reasonable surely?
After-all beneficiaries still get 60pc of it, it’s not like it all goes.
And Jeremy seems to want to reduce IHT in return for giving it a bit more exposure.
Ie, pensions are hit if they turn into inheritance, but at a lower level… so probably balances out for people who’d care any way… (sans the inflationary creep on fixed thresholds which is what their strategy seems to be)
I don't agree with everything you post but I'm with you on this one. IHT is a dodgy tax but it's not a totally unfair one. It could be done better rather than the mishmash of exclusions and how the wealthier can avoid it vs those whose only wealth is property getting stung by it. It's not a tax on the dead, it's a tax on their beneficiaries and they should appreciate that they're getting something that many don't have. It's natural to want to avoid it, but it's not natural to expect to want personal protections after you're gone other than if you've sipped too long at the Kool aid of thinking you're more than everyone else.It could get whole 40pc IHT taxed, it won’t matter as you’ll be dead.
If you do actually care that it has IHT sheltering potential, then having it covered up to say the IHT free amount would seem reasonable surely?
After-all beneficiaries still get 60pc of it, it’s not like it all goes.
And Jeremy seems to want to reduce IHT in return for giving it a bit more exposure.
Ie, pensions are hit if they turn into inheritance, but at a lower level… so probably balances out for people who’d care any way… (sans the inflationary creep on fixed thresholds which is what their strategy seems to be)
If Hunt is actually thinking about that I will be surprised. But I'd have no problem with removing the ability to use pensions to avoid IHT. That he upped the thresholds as soon as he could leads me to believe that he's not thinking of doing that.
A real and fair way to help all our youth would be to reduce earned income taxes on them, funded by increases in Inheritance Tax.
But nobody wants to hear that because they want all that lovely unearned income when their parents croak.
We need to realign our entire approach to taxation, and tax unearned income for more heavily than earned income. Inheritance is a form of unearned income for the recipient.
(I estimate that I stand to inherit perhaps £250k of assets from my Mum when she passes, if she decides to leave her estate to her children and divides it equally amongst us. I see no reason why I shouldn't be taxed at 40% on it, as it would take my income for the year into the 40% tax bracket.)
But nobody wants to hear that because they want all that lovely unearned income when their parents croak.
We need to realign our entire approach to taxation, and tax unearned income for more heavily than earned income. Inheritance is a form of unearned income for the recipient.
(I estimate that I stand to inherit perhaps £250k of assets from my Mum when she passes, if she decides to leave her estate to her children and divides it equally amongst us. I see no reason why I shouldn't be taxed at 40% on it, as it would take my income for the year into the 40% tax bracket.)
Edited by CivicDuties on Monday 20th November 12:28
Indeed.
IHT avoidance ends up distorting the functional purpose of many assets and financial structures.
Ie, pensions become super popular for the IHT sheltering beyond a point.
APR on farmland is a no brainer to park wealth, even if you don’t genuinely need to pass down a working farm to your eldest son
I’d rather see the distorting effects of these kinds of shelters reduced or removed, catch more wealth, but at a lower rate.
All we have is a system that has become a game for wealthy people to play, and they have increasingly huge gains to make it worthwhile.
IHT avoidance ends up distorting the functional purpose of many assets and financial structures.
Ie, pensions become super popular for the IHT sheltering beyond a point.
APR on farmland is a no brainer to park wealth, even if you don’t genuinely need to pass down a working farm to your eldest son
I’d rather see the distorting effects of these kinds of shelters reduced or removed, catch more wealth, but at a lower rate.
All we have is a system that has become a game for wealthy people to play, and they have increasingly huge gains to make it worthwhile.
Mr Whippy said:
Indeed.
IHT avoidance ends up distorting the functional purpose of many assets and financial structures.
Ie, pensions become super popular for the IHT sheltering beyond a point.
APR on farmland is a no brainer to park wealth, even if you don’t genuinely need to pass down a working farm to your eldest son
I’d rather see the distorting effects of these kinds of shelters reduced or removed, catch more wealth, but at a lower rate.
All we have is a system that has become a game for wealthy people to play, and they have increasingly huge gains to make it worthwhile.
Bolded my thoughts exactly. But I'm aware that could leave me accused of not attacking the wealthy enough and that the wealthy will complain about being attacked anyway regardless of other's situations as that's what they do. So it's a fIHT avoidance ends up distorting the functional purpose of many assets and financial structures.
Ie, pensions become super popular for the IHT sheltering beyond a point.
APR on farmland is a no brainer to park wealth, even if you don’t genuinely need to pass down a working farm to your eldest son
I’d rather see the distorting effects of these kinds of shelters reduced or removed, catch more wealth, but at a lower rate.
All we have is a system that has become a game for wealthy people to play, and they have increasingly huge gains to make it worthwhile.
ker of a problem to sort given prior history.Never knew about the farming one but it's obvious now that I've heard it and think about it. I'll never understand why politicians fear farmers so much as I'd tell them where to go and it won't be here but I've never been a politician or a farmer.
https://moneyweek.com/personal-finance/pensions/st...
“Many people believe that there is a ‘pot of money’ specifically set aside for their state pension. They think, ‘I've paid into it all my life, so there should be something allocated just for me, right?’ However, unfortunately that's not quite how it works.”
“Many people believe that there is a ‘pot of money’ specifically set aside for their state pension. They think, ‘I've paid into it all my life, so there should be something allocated just for me, right?’ However, unfortunately that's not quite how it works.”
That article also (correctly) flags that the State pension is a benefit - it can be changed largely at the will of the government with no firm rights to the benefit “accrued” to date, much like any other benefit.
A lot of people (Twitter) seem to take offence at the State pension being described as a benefit as if it somehow demeans them to be in receipt of benefits.
A lot of people (Twitter) seem to take offence at the State pension being described as a benefit as if it somehow demeans them to be in receipt of benefits.
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