Spring Budget 2023

dLockers said:
Poor people should stop smoking then. It isn't difficult maths.
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To you maybe, but it is probably the hardest habit to break and the fact people are poor leads them to cigarettes and alcohol as a coping mechanism for stress.

We’re not all lucky enough to live nice comfortable lives where we know exactly where our next rent payment or gas bill money is coming from.
 
thenewoc said:
I doubt businesses are suddenly going to be rushing to employ more workforce with an extra 6% on corp. tax to find. I suspect quite the opposite will happen, that the workforce will shrink to offset lower profits.
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It's okay, corporations are all engaging in tax avoidance so that they're not paying the current rate anyway, amirite? :o
 
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robfosters said:
To you maybe, but it is probably the hardest habit to break and the fact people are poor leads them to cigarettes and alcohol as a coping mechanism for stress.

We’re not all lucky enough to live nice comfortable lives where we know exactly where our next rent payment or gas bill money is coming from.
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Rich people don't have stress, got it.
 
ci_newman said:
It's not impossible at all.
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Firstly, I rather doubt anyone on the salary figure you picked would actually be hitting the LTA. Secondly, the amount you get on a annuity depends on when you start taking it, playing around with L&G's annuity calculator shows an annuity of £3.5k/year lower if you start retirement at 60 rather than 65. Thirdly, the time you are working you are increasing your savings and investments†, whether you put them into a pension or not you will always have more saved and invested if you do that for longer.

† It seems fair to assume people looking at the LTA limit having earnings higher than outgoings.
 
robfosters said:
Not financial stress
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More you earn more you spend. If you don't think people earning large sums have financial stress then you are wrong. You need to differentiate between those working earning good sums and those who are rich with assets and no need to work to provide a house and a lifestyle.
 
dLockers said:
The only people who don't have financial stress are those on the treacle stick. I can assure you my near-on 4k mortgage is a gigantic worry for me and if I lose my job it is incredibly difficult to get back on my feet.
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Next up, you chose to buy that house and there are cheaper areas :D
 
ci_newman said:
It's not impossible at all.

Imagine someone at aged 60, with an annual salary of £50k/year. That would give an annual take home of ~ £38k after tax.

Now consider that person also has a pension at the LTA of £1million. If we allow for an average return of 5% per year (which is just 50% of the typical S&P market returns over the last 100 years), that pension is returning £50k/year. We're at the LTA so we can't reinvest those returns.

So instead of working for £38k/year per year, you can take a drawdown of 5% on your pension and stay below the LTA. You pay income tax on pensions but you're still entitled to the £12500 tax free amount and the first 25% of a drawdown is tax free too which would give you a net income of ~ £41k / year.
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But surely that's not the LTA giving the incentive to retire, it's that that person can retire and live a better life without working? Raising the LTA to £1.8 million or whatever doesn't change the maths?

That's assuming a 60 year old on £50k realistically could've reached a £1m pot, without the help of final salary type pensions, which I kinda doubt...
 
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