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Sunak pension tax raid


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1 minute ago, Si1 said:

Really? I thought he had about ten houses?

The Chancellor needs the money to give to his friend next door, who has developed rather extravagant ways. A real break from traditional Conservative spending habits.

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1 hour ago, byron78 said:

How many of you proles have 800K pension pots?

In the last few years thousands, if not tens of thousands, of people have transferred £800k+ lumps out of generous final salary schemes who had 20+ years of service and a middle to high salary.

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1 minute ago, hotblack42 said:

In the last few years thousands, if not tens of thousands, of people have transferred £800k+ lumps out of generous final salary schemes who had 20+ years of service and a middle to high salary.

That's an interesting point, they benefitted from actuarially calculated settlements based on ludicrous low interest rates iirc.

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9 minutes ago, hotblack42 said:

In the last few years thousands, if not tens of thousands, of people have transferred £800k+ lumps out of generous final salary schemes who had 20+ years of service and a middle to high salary.

Have they? I can't seem to find out how many people have hit that figure. https://www.ons.gov.uk/peoplepopulationandcommunity/personalandhouseholdfinances/incomeandwealth/datasets/pensionwealthwealthingreatbritain

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4 minutes ago, Si1 said:

That's an interesting point, they benefitted from actuarially calculated settlements based on ludicrous low interest rates iirc.

Correct. The ludicrously low interest rates also enable Governments across the World to borrow huge amounts to finance their spending plans, and asset strippers to buy Morrisons supermarket using borrowed money. Low interest rates have also put rocket fuel into house prices.

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1 hour ago, byron78 said:

How many of you proles have 800K pension pots?

Judging by the fact that typing 'lif' into google immediately generated 'Impact of exceeding the Lifetime allowance' I'd say this is trending..
Many IFAs will be getting calls today I reckon.

I realise this is a tiny violin topic, but really? - Taxing pensions in flight rather then unearned land and property gains?  Really?

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It'll be surprising if the chancellor does go down this path, particularly after the Chesham by-election result. Yes there is a bill coming in for the Brexit and Covid measures, but hammering the well-to-do middle classes could be electoral suicide for a Conservative government.

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1 minute ago, Trampa501 said:

It'll be surprising if the chancellor does go down this path, particularly after the Chesham by-election result. Yes there is a bill coming in for the Brexit and Covid measures, but hammering the well-to-do middle classes could be electoral suicide for a Conservative government.

To the contrary. The well to do Tory voting middle classes are property wealthy, or they see it that way. Average age about 72. They don't understand investment returns and even think there a bit vile, but property always goes up ,(with a little push from govt)

Edited by Si1
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46 minutes ago, Trampa501 said:

It'll be surprising if the chancellor does go down this path, particularly after the Chesham by-election result. Yes there is a bill coming in for the Brexit and Covid measures, but hammering the well-to-do middle classes could be electoral suicide for a Conservative government.

The usual political solution to this problem is to grandfather the existing rights and apply the harsher policy to younger/newer entrants. So for example, you could say anybody with a state pension age before 2045 continues with the old reliefs and lifetime allowance while those with SPA from 2045 onwards get new pension rights where it's 30% relief for everybody on the way in and a lower lifetime allowance, plus to sweeten the deal you can withdraw up to £50k once to buy a principal residence in the UK. Win win.

Edited by Dorkins
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I will have 1M by the time i am 50. saving the full 40k a year into the pension making great sacrifices to do so not a massive earner as i live on near minimum wage. Of course I am disappointed in this it isn't tax relief it is deferred taxation i wouldn't object if i could take the income tax free and not be taxed twice when i crystalise the pension but that wont happen. This is yet again a Tax attack on the young savers. The conservatives will never get my support again if they do this.

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1 hour ago, onlooker said:

The Chancellor needs the money to give to his friend next door, who has developed rather extravagant ways. A real break from traditional Conservative spending habits.

The tradition of George Osborne spending more in a single parliament than every Labour government combined?

 

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3 hours ago, byron78 said:

How many of you proles have 800K pension pots?

5 million? Presumably most well paid public sector workers will be hit by this (a small pension that increases with inflation would be worth 800k or more) - doctors, lots of teachers, nurses, civil servants, police etc.

Or if you are moderately well paid for 30-40 years and contribute a reasonable chunk, then assuming poor investment returns, you will probably exceed 800k. With high earners or good investment returns, you would exceed it by a lot.

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3 hours ago, winkie said:

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.;)

This is because of the housing crisis. 

The government should solve the housing crisis. A big element of this would be to tax landlords and owner occupiers (I would argue the taxes on landlords should be punitive. It's debatable how much owner occupiers should be taxed).

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14 minutes ago, Young Turk said:

5 million? Presumably most well paid public sector workers will be hit by this (a small pension that increases with inflation would be worth 800k or more) - doctors, lots of teachers, nurses, civil servants, police etc.

Or if you are moderately well paid for 30-40 years and contribute a reasonable chunk, then assuming poor investment returns, you will probably exceed 800k. With high earners or good investment returns, you would exceed it by a lot.

If someone earns an average of 40k over a 40 year career then at 1/50 annually accrual they'll get something like 32k pension at retirement age. Ok a bit less because increments are uprated by CPI every year. Ballpark. Ok yeah at index linked annuity rates of circa 3% then yes that's about a million quid cash equivalent. Fair enough.

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2 hours 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.

Osborne kept talking about further reductions to the maximum annual contribution limit. This actually wasn't too bad, as it encouraged people to make big contributions, in case it was the last year they were able to.

Threatening to reduce the lifetime allowance will have the opposite affect. Making big contributions will be seen as too risky.

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10 minutes ago, Young Turk said:

Osborne kept talking about further reductions to the maximum annual contribution limit. This actually wasn't too bad, as it encouraged people to make big contributions, in case it was the last year they were able to.

Threatening to reduce the lifetime allowance will have the opposite affect. Making big contributions will be seen as too risky.

Sunak is a very irresponsible chancellor with a loose wallet and an even looser tongue. 

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3 hours 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.

My best mate just finalised his divorce, he gave up all but £100k on the £800k family home, a £150k private pension pot, and agreed to pay the maintenance at the gov rate for his kids until they reach 18/21 (youngest is 13).  

All this to keep untouched his public sector final salary pension, currently set to pay out £40k p/a, and he still has 15 years to retirement!!  

his wife wanted half that too, that was a final straw for him, so said lets go to court, She gave in when she was advised the costs of fighting in court and a judge wouldn't just hand her 75% of all the family / her husbands assets just because he had an affair.  

I did tell 1 BTC on the Dark web could hire a hit man. 

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3 hours ago, byron78 said:

25K a year saved for 25 years?

CEO or public sector?

you don’t need to be either of those. 

You can do this earning 50k, easily, And still live relatively well. Heck if you have a family and rent, you can do this and reduce your earnings (all the way to minimum wage) such that you'd qualify for quite a bit in bennies.

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3 minutes ago, Frugal Git said:

you don’t need to be either of those. 

You can do this earning 50k, easily, And still live relatively well. Heck if you have a family and rent, you can do this and reduce your earnings (all the way to minimum wage) such that you'd qualify for quite a bit in bennies.

You don't even need to save £25k PA if invested well. I've never put more than £18k into my pension, but will exceed the LTA without anymore money being added.

That said, I did start pension saving very early in my career.

 

 

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3 hours ago, PeanutButter said:

:D  This is why I have properties!

Yes, I'm the same. Lots and lots of investments.

It does look like another raid on the middle classes to me (rather a raid on, well... me!)

Thanks again Tories, but I really do have quite enough now (and I've resolved to stop voting for you if I get another chance).

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