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ChumpusRex

Proposed Pension Changes - More Petrol For The Fire Of Btl?

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Rumoured new pension changes will effectively make prevent high earners from paying into either a works or personal pension.

For persons earning over £150k in a tax year, there will be a reduction in the allowable pension contributions as low as £10k pa.

http://www.moneywise.co.uk/news/2015-07-02/whats-store-next-weeks-blue-budget

Previously, pensions had provided a home for some of the disposable income in this earnings bracket - with this option looking to be closed, I'm guessing that BTL will be looking attractive.

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I think it's more likely that those who made out like bandits pre-2008 and just after weren't as stupid as the government and so limits on lifetime/annual pension allowance didn't stop them stuffing as much money as possible in their pension to avoid the 50% tax so they want to take them away. Pensions are unnecessarily complex and generous so this could turn out to be worthwhile tax simplification, but you'll forgive my cynicisim on presuming it will more likely be a failed attempt to recoup already spent tax whilst at the same time pandering to populist sentiments and not caring about the exploding uncertainty and ridiculous numerical instabilities in the tax system.

Not that this government have many priors on that ... well, except for almost every policy I've ever heard of course.

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Rumoured new pension changes will effectively make prevent high earners from paying into either a works or personal pension.

For persons earning over £150k in a tax year, there will be a reduction in the allowable pension contributions as low as £10k pa.

http://www.moneywise.co.uk/news/2015-07-02/whats-store-next-weeks-blue-budget

Previously, pensions had provided a home for some of the disposable income in this earnings bracket - with this option looking to be closed, I'm guessing that BTL will be looking attractive.

Anyone earning that much long-term would soon hit the lifetime limit for pension savings. Limiting their per-year contributions will just hit people who have one or two really good years in a lifetime of much lower earnings.

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They can spend it and create 'Trickle Down'?

Trickle down is a myth. Actually it is a double myth.

The first myth is that it works. There is no evidence to support this. The second myth is the theory - no such economic theory exists.

Left-wing elements of the media love attacking an economic theory that does not actually exist.

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