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Sunak pension tax raid


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Ok, this is getting ridiculous, having paid to "save" the babyboomers and older during the pandemic,  GenX, Millennials and GenZ are now being asked to foot the bill from their pensions.

All the talk is of raiding pension pots for the working, whilst leaving the triple lock in place.

https://www.telegraph.co.uk/politics/2021/06/20/pensions-raid-pay-covid-pandemic/

Pensions raid to pay for Covid pandemic

The Treasury is considering ways to claw back cash with a series of tax tweaks – but the ‘triple lock’ will remain in place

Treasury officials are drawing up plans for a pensions tax raid in the autumn to help pay for heightened public spending during the Covid pandemic, The Telegraph understands.

Three different reforms to the way in which pension contributions are taxed are being considered amid pressure on the public finances, according to well-placed Whitehall sources.

One of the ideas being examined is reducing the pensions lifetime allowance from a little above £1 million to £800,000 or £900,000, lowering the point above which extra tax charges kick in.

Another would see individuals contributing to pensions getting the same rate of tax relief, meaning higher-rate taxpayers lose out, while a third is new taxation on employer contributions.

"Our job is to keep people out of poverty, not to enrich the middle classes," said a senior government source familiar with the proposals, which are still at the exploratory stage.

 

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9 minutes ago, Mikhail Liebenstein said:

Ok, this is getting ridiculous, having paid to "save" the babyboomers and older during the pandemic,  GenX, Millennials and GenZ are now being asked to foot the bill from their pensions.

All the talk is of raiding pension pots for the working, whilst leaving the triple lock in place.

https://www.telegraph.co.uk/politics/2021/06/20/pensions-raid-pay-covid-pandemic/

Pensions raid to pay for Covid pandemic

The Treasury is considering ways to claw back cash with a series of tax tweaks – but the ‘triple lock’ will remain in place

Treasury officials are drawing up plans for a pensions tax raid in the autumn to help pay for heightened public spending during the Covid pandemic, The Telegraph understands.

Three different reforms to the way in which pension contributions are taxed are being considered amid pressure on the public finances, according to well-placed Whitehall sources.

One of the ideas being examined is reducing the pensions lifetime allowance from a little above £1 million to £800,000 or £900,000, lowering the point above which extra tax charges kick in.

Another would see individuals contributing to pensions getting the same rate of tax relief, meaning higher-rate taxpayers lose out, while a third is new taxation on employer contributions.

"Our job is to keep people out of poverty, not to enrich the middle classes," said a senior government source familiar with the proposals, which are still at the exploratory stage.

 

+1 is obscene when things like the property inheritance tax rebate and triple lock pensions exist. Private pensions are, by definition, earned and invested wealth. It's unlikely to affect me but the knock on effects to the economy do. Pushing money into housing speculation, deincentivising productivity etc.

Tory party - the party of lazy privilege.

Edited by Si1
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7 minutes ago, byron78 said:

How many of you proles have 800K pension pots?

I will do in about 6 months.

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11 minutes ago, byron78 said:

How many of you proles have 800K pension pots?

Not many.

3 minutes ago, Mikhail Liebenstein said:

I will do in about 6 months.

Is it not enough......how much would be a good figure to work towards?;)

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Just now, winkie said:

 

Is it not enough......how much would be a good figure to work towards?;)

It's none of your business to tell someone how much they should gain from investments and work. It's 'enough' that unearned wealth has such golden status in the govt's eyes frankly.

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I would need to make adjustments if this is the case, I’m on for 800k in mine before I hit 50 

800k, at current annuity rates (obvs most of us lot would use drawdown, but it’s still an important measure) would not return a brilliant amount - probably 35k p/a for a 65 year old retiree, non index or spousal linked.

you could probably drawdown around 30k p/a and maintain the fund if you’re proficient. 

Sounds a lot, but it’s not really. It’s baffling how they can consider this. 800k will be jack sh1t soon.
 

Edit - the bits about reducing reliefs going in, and taxing employer contribs I can well believe though. Make hay while the sun shines. 

Edited by Frugal Git
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10 minutes ago, Si1 said:

It's none of your business to tell someone how much they should gain from investments and work. It's 'enough' that unearned wealth has such golden status in the govt's eyes frankly.

I realise some will want and need more than others to have a similar quality of life in retirement, the point is if people can't afford to put much aside into their pension because of other financial living commitments they can't make use of all the pension tax breaks and their pot will be so much smaller........we can't all earn the same, but that doesn't mean are less important or job less valuable in the eyes of others and policy makers.;)

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3 minutes ago, Frugal Git said:

I would need to make adjustments if this is the case, I’m on for 800k in mine before I hit 50 

800k, at current annuity rates (obvs most of us lot would use drawdown, but it’s still an important measure) would not return a brilliant amount - probably 35k p/a for a 65 year old retiree, non index or spousal linked.

you could probably drawdown around 30k p/a and maintain the fund if you’re proficient. 

Sounds a lot, but it’s not really. It’s baffling how they can consider this. 

And if the same limits and taxation were fairly applied to public sector final salary schemes, the effects would be very severe.

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2 minutes ago, onlooker said:

And if the same limits and taxation were fairly applied to public sector final salary schemes, the effects would be very severe.

Yes, quite. I’d imagine swathes of very average public sector earners have defined benefit pensions effectively worth way more than 800k.

Edited by Frugal Git
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If this happens, it’s time to consider the old plan - ‘hedging’ my pension with a spread bet. 

depending on the way the wind is blowing, short FTSE in one, long in the other. Aim - always keep value of pension pot to below LTA, by losing in the pension and winning in the tax free spread bet shelter. 

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1 minute ago, Frugal Git said:

Anyway, it’s all smoke and mirrors.

100% there will be some kind of loophole - by design - somewhere that creates an alternative opportunity to avoid tax for those in the know, or who know where to look. There always is.  

What will they do with savings made, buy another house or yacht or employ a nurse, maid or butler?;)

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1 minute ago, winkie said:

What will they do with savings made, buy another house or yacht or employ a nurse, maid or butler?;)

Coming from someone who luckily bought a house in North London in the 90s? Seriously?

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38 minutes ago, hurlerontheditch said:

I said this on a thread last week. Pensions are in the cross hairs. 

Osborne always used to make these noises about raiding pensions in the runup to budgets/Autumn Statements, never actually did it.

I wonder if it's expectations management, make it sound like you're going to hurt the middle classes and then don't so they feel a sense of relief/gratitude rather than make it sound like you're going to help the middle classes then deliver something underwhelming so they feel cheesed off that you aren't doing enough for them.

It's all very Court of Henry VIII/Game of Thrones, I can take everything away from you with a click of my fingers so you better get grovelling.

Edited by Dorkins
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Just now, Dorkins said:

Osborne always used to make these noises about raiding pensions, never actually did anything.

I wonder if it's expectations management, make it sound like you're going to hurt the middle classes and then don't so they feel a sense of relief rather than make it sound like you're going to help the middle classes then deliver something underwhelming so they feel cheesed off that you aren't doing enough for them.

possibly

 

the elephant in the room is land value tax. would get a lot of cash in for the prolific cash waster in N10

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Isn't the triple lock currently forecasted to be turning out a 6% + rise this year. I've had no payrise for 2 years and now there is talk of taxing my private pension more as well as making me work longer. This is at the same time as trying to take child benefit off me and my kids facing a massive bill should they choose to go to uni. Feels like those two decades older got everything and now they're taking everything off those younger. The impacts are very uneven.

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1 minute ago, hurlerontheditch said:

the elephant in the room is land value tax. would get a lot of cash in for the prolific cash waster in N10

Other than 5% council tax hikes nothing will happen on property taxation in this decade.

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3 minutes ago, Dorkins said:

Osborne always used to make these noises about raiding pensions in the runup to budgets/Autumn Statements, never actually did it.

I wonder if it's expectations management, make it sound like you're going to hurt the middle classes and then don't so they feel a sense of relief/gratitude rather than make it sound like you're going to help the middle classes then deliver something underwhelming so they feel cheesed off that you aren't doing enough for them.

It's all very Court of Henry VIII/Game of Thrones, I can take everything away from you with a click of my fingers so you better get grovelling.

Possibly, but I think the Chancellor really, really, needs the money this time.

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