2024 UK politics - now with Labour in charge
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Sorry. My wording wasn't clear. I was referring to a loss from your pension fund in the form of additional tax paid to the Chancellor.
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That's fine. You can send me the £10k you won't miss in a series of £1k payments!
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Thanks. But unless I've misunderstood, none of the above changes the fact that if your TFLS is reduced then you'll end up worse off, all other things equal.
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It'll be more like £33.33/month over 25 years. I could, but I won't.
The above may be fact, or fiction, I may be serious, I may be jesting.
I am not sure. You have no chance.Veronese68 wrote:PB is the most sensible person on here.0 -
You won't, because obviously £33.33 a month for 25 years is actually a quite a big financial commitment, even if you could cut your coat accordingly.
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yep
imo forced annuity was a scam, too cosy a relationship between government and the industry, literally a bet that you'll die before the issuer loses money, where the issuer is the bookie and they've already rigged the race
sipp: make your own decisions and control who will get the remaining assets when you snuff it
my bike - faster than god's and twice as shiny0 -
£33.33/month is hardly a big financial commitment to an individual with a £400k+ pot already accrued.
That's a couple of TV streaming subscriptions, or a pint a week.
The above may be fact, or fiction, I may be serious, I may be jesting.
I am not sure. You have no chance.Veronese68 wrote:PB is the most sensible person on here.0 -
For everyone who doed earlier than the predicted age there was someone who lived longer (less a profit margin obviously). It was hardly a scam, but annuities are inflexible, and rates were low from 2008-2022 so they weren't attractive. In part that is down to the regulations surrounding the assets the providers are forced to hold to match the liabilities, which aren't the right mix for long term investing (regulators that nce again know too little).
People want flexibility for a changing world, understandably, and for some annuity is the right answer, especially given improved current rates, and that pretty much all the remaining providers offer rates based on the individual's health and lifestyle.
Oh, and it was never technically a forced annuity purchase, though the regulator made that the default option for pots under c£150k, no matter what other income sources you may have had. Pensions freedoms moved the dial from one end of the spectrum to the other so drawdown is now the norm and annuity less usual.
The policy was an example of how Governments don't need to leak things - only about 6 people knew of the 2015 changes, and very deliberately, no one at the FCA knew in advance.
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Is this the new rule - tax is only a good idea if people aren't going to notice it?
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As I've said already, you can demonstrate the minimal size of such a commitment by paying me £33.33 a month for the next 25 years. If you won't notice it's gone, I'll happily take it off you.
Or as a middle ground, so some undeserving internet no-name doesn't benefit, you could up your contributions to charity by £33.33 a month. (And likely annoy Ms Reeves by reducing your tax liability as an added bonus.)
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It might be your new rule. It's certainly not my new rule. If you've genuinely deduced that from what I've posted then you're mistaken.
But if you can levy a tax without people noticing it then you've surely cracked being Chancellor!
But seriously, you can Google the characteristics of a good tax (which is surely <=> a tax being a "good idea") e.g.
- Fair
- Easy to collect
- Non-distortionary
- Increases social welfare
- Transparent in the sense that taxpayers should know what they are paying for the services they are getting
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It's really difficult to detect when you say things like "You can send me the £10k you won't miss" as if that's the key point.
Thanks for the list of the characteristics of a good tax, I think that taxing people on their pension income meets all of those requirements.
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What on earth are you on about
- Genesis Croix de Fer
- Dolan Tuono0 -
If it comes to pass then I will be sending the money to people more needy. Happy?
The above may be fact, or fiction, I may be serious, I may be jesting.
I am not sure. You have no chance.Veronese68 wrote:PB is the most sensible person on here.0 -
It's also a bit different giving it to some random on the Internet to giving it to the Government to do stuff (or to line the pockets of their mates) so the analogy doesn't work.
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I think the idea is that the amounts talked about aren't going to suddenly impoverish you, not that you'd be happy giving the money away.
Anyway, unfortunately, Starmer boxed himself in with his taxation election commitments, so is left with fiddling changes that probably won't make a large difference. Ultimately, he either needs to increase taxe revenue, increase borrowing, or cut public services. Efficiency savings are largely for the birds for all sorts of reasons.
I think Starmer should have got rid of the triple lock instead of means testing winter fuel if he was going to make a big unpopular move.
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It's all a waste of time unless they change the fiscal rules so that some infrastructure can improve in this country.
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The days of the triple lock are numbered, but I believe it was in the manifesto.
By the time of the election Labour will be back to a double lock and the Tories will be up to probably a sextuple lock, with anything less being a war on Mary Berry.
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A lot more outrage about pensions than CGT.
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Probably because more people have a pension than investments.
Also lots of people haven't a clue about CGT and don't think it will ever impact them, though the cut in the annual allowance to £3k will result in some unexpected tax bills (if they realise the need to declare their gains!).
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In which case you can afford to send me and W&G 10 grand each as you said that it shouldn't make any difference to people in that position.
"I spent most of my money on birds, booze and fast cars: the rest of it I just squandered." [George Best]0 -
Well I didnt, but if it's going to make enough of a difference to you over 25 years that you're begging people on the internet maybe you should reconsider your retirement plans.
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Glad you agree that it matters then.
Anyway supporting a policy that will make you worse off seems a bit unwise. But if it makes you feel better or makes you think that your argument is somehow more valid then good for you.
"I spent most of my money on birds, booze and fast cars: the rest of it I just squandered." [George Best]0 -
I hate to admit it, but I am rather clueless when it comes to pensions. Assuming I am still around I will have a small NEST pension worth circa £65k at retirement age, plus SP of course. At the moment I have savings in high interest accounts and FRB which is basically the start of my personal pension pot.
I don't have enough knowledge of whether this is the best way to build it up, or whether I should have a dedicated pension fund like SIPP. Any thoughts?
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It's usually worth matching your employers contributions at a minimum, for the tax benefit.
Lots of factors though.
- Genesis Croix de Fer
- Dolan Tuono1 -
I didn't say that either. If you're just going to invent things to argue against, then why bother?
It is interesting that you think that seeing some logic in a policy that won't benefit me directly is unwise.
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So does it matter or not?
"I spent most of my money on birds, booze and fast cars: the rest of it I just squandered." [George Best]0 -
What are you asking? Does what matter, to who, and what do you mean by it mattering?
And do my answers have any bearing on your thoughts on the inherent logic of the policy?
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benefit of putting money into a sipp/other pension wrapper is the tax relief on the way in, growth is tax free inside the wrapper, taxed at your marginal rate on the way out
once in a sipp, it's your asset, you can bequeath it, and if you snuff it before 75 there're tax benefits for the beneficiaries
once you are at the point you can extract money: tax free lump sum, with other drawdown taxed at your marginal rate, or use some/all for an annuity/whatever
watch out for platform management fees, a fee of, say, 0.3% may not sound much more than, 0.2%, but compounded over time, it adds up, also there may trading charges, withdrawal charges etc., some platforms are a lot pricier than others, funds also have fees
spend some time researching, for instance https://www.moneysavingexpert.com/investments/
if you've multiple small pension pots from different jobs/personal plans, transferring/consolidating into a sipp reduces the admin etc. of having money splattered all over the place and may generate higher returns, definitely one for expert advice though, especially if there's any defined benefit involved
if you do retire with any db pension, bear in mind you can also take lump sum from there, it can work out much more favourable to extract the lump from db rather than your sipp, it gets the money into your hands and while it'll reduce the db amount, it may still work in your favour - again, this needs proper advice at the time
cash savings/investments, use your isa allowance, growth is tax free
keep contingency money in a fast-access savings account, keep an eye on rates, if you can get better return by moving the money, move it
of course the tax rules will change over time, keep an eye out so you can adjust your strategy
if you can use excel etc., you could create a long term financial model
my bike - faster than god's and twice as shiny1 -
