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The Great Pension Scandal

Discussion in 'Speaker's Corner' started by Stretch, Apr 6, 2015.

  1. Monkeynut

    Soldato

    Joined: Nov 7, 2007

    Posts: 6,479

    Location: Cheshire

    The thing is that private pensions will probably stay the same age because your pension reflects the size of your pot so if you retire at 65 you just get less. Everyone should pay into their private pension for enough to survive without a state pension. I'm 25 so probably won't get one.
     
  2. The_Abyss

    Capodecina

    Joined: May 15, 2007

    Posts: 12,805

    Location: Ipswich / Bodham

    You‘ve already demonstrated sufficient lack of understanding of detail to suggest that you need advice. There’s nothing to debate here, so I’d suggest that you carry on in GD instead.
     
  3. Uther

    Capodecina

    Joined: Jun 16, 2005

    Posts: 12,490

    Oops, drunken posting, I really shouldn't do that! Yes, off to see someone next week, I'm certainly no expert here.
     
  4. The_Abyss

    Capodecina

    Joined: May 15, 2007

    Posts: 12,805

    Location: Ipswich / Bodham

    I didn’t mean to sound harsh, and I glad you’re seeing someone to sort it. Just the simple act of saying that you’re going to draw some tax free without evidence of need for the cash, but then also saying you’re going to start another new pension to pay into rings a few alarm bells. Your new workplace pension may be able to take the contributions that you were planning in a new SIPP, at far better value than someone like Hargreaves.
     
  5. Uther

    Capodecina

    Joined: Jun 16, 2005

    Posts: 12,490

    Yes after looking at HL today, I suspect my workplace pension will be a better place for the cash, especially if my employer will add 3%.
     
  6. GWANGY

    Gangster

    Joined: Apr 25, 2017

    Posts: 193

    Location: london

    They (govt) should do away with the fiction of National insurance and just add it to income tax . Its a complete farce, and imagine the money wasted in administering these two complex payments, but of course no party wants the tax increase label.
    Private rents for pensioners is a problem .. but demographics may come into play , as the number of households , and thus demand , starts to fall..
    A sustained boost to Council Hosuing would solve quite a few problems, as long as they were not sold off.
    Did anyone see that prgram on ITV about Pensions ? complete load of alarmist rubbish , with very few facts and figures.
    Can I run CrySis on my Pension ? I hope so , and in more like 16k than 4k ;)
     
  7. muon

    Capodecina

    Joined: Nov 8, 2006

    Posts: 18,835

    Location: London

    Yeh national insurance is simply a clever way of disguising the fact most people pay 32% in tax whilst the higher rate is only 42%. 20% and 40% sounds better.

    Then there is the 62% rate of tax that very few people (other than those paying it) are aware of. It's silly, just bring the top 47% rate that exists to a much lower level.

    As for this thread, like I said way earlier, this triple lock is gonna break the state pension system. It will force it to be means tested once we reach a stage where absurdly high levels of tax revenue are going into paying pensions. Of course everyone will lobby as hard as they can that this happens after they start receiving their pension, maybe even admit the triple lock was a bad idea to keep the game of musical chairs going long enough for them.
     
    Last edited: Dec 26, 2019
  8. Mr Badger

    Sgarrista

    Joined: Dec 27, 2009

    Posts: 7,734

    So, according to the BBC quoting the Sunday Telegraph:

    A cut to pension tax relief should really encourage people to save more for their retirement - especially those lower paid workers than currently struggle to save anything at all.

    Although having said that, a change that I think could be justified would be to give pension tax relief at the basic rate of income tax for everyone, rather than the current approach of giving it at the highest applicable rate.
     
  9. GWANGY

    Gangster

    Joined: Apr 25, 2017

    Posts: 193

    Location: london

    I dont think we are over generou in our pensions , far from it in fact. Our SPA is among the highest (europe) and the actual pension is among the smallest. The triple lock is just starting to bring Uk pensioners more into line with workers (% of average wage) and other euro countrys. Those in thier later Youth (50+) simply dont have ability to absorb any new pension cuts . AFAIK the minimum employee contrib rises to 5% soon , which will also alleviate some future costs. Altho as more people get "employed" in the Gigs then private provision becomes more important.
     
  10. Greebo

    Caporegime

    Joined: Jan 20, 2005

    Posts: 35,528

    Location: Co Durham

    The problem is the huge costs. I agree our pensions are poor compared to comparable economies but for the last 50 years everybody should have been paying more tax/NI or whatever.

    The issue with the triple lock and the increases in pensions now is that it will be the current generation of workers who will be expected to pay all of that through taxation and on top of that effectively pay 8% of their wages over to save for a pension for themselves as it is expected there wont be a state pension by the time they retire.
     
  11. Edinho

    Mobster

    Joined: Sep 29, 2003

    Posts: 4,249

    Location: Not darn sarf

    Im 48. My advise would be to save everything to get a house first and that would mean forego the pension. Get the house then put into the pension. Not owning a home these days is financial suicide.
     
  12. The_Abyss

    Capodecina

    Joined: May 15, 2007

    Posts: 12,805

    Location: Ipswich / Bodham

    To put some things into perspective, the current cost of tax relief on UK pensions is less than 10% of the total bill for tax relief on everything else. Oddly, you don't hear about all those other tax incentives very much.

    I imagine that this may well be a typical Boris ploy to look good to his new hard-won former Labour voters.

    If it were introduced then the traditional Tory voters would get their house, save some pension, and then buy more lower value properties to rent to Labour voters who could never then benefit from higher rate tax relief, and just get sufficient pension to continue to pay their rent. Over cynical view, but there you go!
     
  13. Hagar

    Sgarrista

    Joined: Mar 1, 2010

    Posts: 8,553

    Location: Prev. Nkata Cheshire

    I dont think it very helpful to place it in the Labour /Conservative terms. I am sure that there are many Labour landlords. But if you insist, Labour made it easier to profit from buy-to-let when in power but recent Conservative budgets have clamped down or made it less profitable.
     
  14. The_Abyss

    Capodecina

    Joined: May 15, 2007

    Posts: 12,805

    Location: Ipswich / Bodham

    I did say that it was an overly cynical view...
     
  15. GWANGY

    Gangster

    Joined: Apr 25, 2017

    Posts: 193

    Location: london

    The majority of Pension tax relief goes to the top 15% .. The bottom 50% (of pension savers) get very little. Paying high rents/ inflated house prices is a big stopper for most people to save "sensible" amounts to their pension. I suspect there will always be a pension, as not everyone will have their own privte pension pot, or it will have been lost to fraud, divorce, frivolity.
    the Govt is saving vast sums by increasing the pension age to 68, possibly 70 (waspi's also, 58B), the trade-off was going to be Better Pensions.
    BTW Covid has really turned into a crisis .. they've delayed the F1!
     
  16. The_Abyss

    Capodecina

    Joined: May 15, 2007

    Posts: 12,805

    Location: Ipswich / Bodham

    That's kind of the point of tax relief. Those that are paying the highest tax will benefit the most from a relief.

    The majority of the remainder of your comments are, frankly, nonsense. Fraud? Not great, but yes, some happens. FSCS is there to cover some of it. Divorce? The pension isn't lost - it is just transferred to somebody else. Frivolity? Really? Are you serious? Yes, pensions can be lost by people spending them, in whatever manner they choose.

    BTW - F1 is cancelled in China. Pity - not a great track but it does, in very recent times, deliver some interesting races.
     
  17. SpeedFreak

    Soldato

    Joined: Nov 14, 2002

    Posts: 6,894

    Location: Bristol

    It's not really relief as its deferred income.

    I earn a good basic income and between my own and my employers contribution am adding 21% of my salary to my pot each year. If I were to target a pension of half my current salary I would need to save at my current level for a total of around 30 years to get to an income level that may not replace my current living standard.Start stripping away 42% from the contributions and it will obviously take a lot longer. If the government does that will they insist that I pay tax on on my employers contribution upfront therefore reducing my current take home salary? Will my pension annuity be entirely tax free when I start to use it as a reflection that it would otherwise be double taxed?
     
  18. Jokester

    Don

    Joined: Aug 7, 2003

    Posts: 40,503

    Location: Aberdeenshire

    https://www.bbc.co.uk/news/business-53082530

    Pension Triple Lock could result in the state pension increasing ~18% next year due to Covid wage anomaly.

    Can see the triple lock being completely removed now as a result.
     
  19. Stretch

    Capodecina

    Joined: Feb 14, 2004

    Posts: 12,212

    Location: Peoples Republic of Histonia, Cambridge

    Pretty sure Sunak is on record only a few weeks ago saying it’s a manifesto commitment that will be kept. Along with no rises in income tax, National Insurance or VAT.
     
  20. Greebo

    Caporegime

    Joined: Jan 20, 2005

    Posts: 35,528

    Location: Co Durham

    Perhaps that was before the figures came out which would show under the triple lock that pensions would have to go up by 18%? state pensions cost £94bn per annum. I am not sure Sunak could handle finding another £17bn per year to pay that kind of increase!

    As they say, a week is a long time in politics.