Another raid on pensions?

Graham_Devon

http://www.thisismoney.co.uk/retirement/article.html?in_article_id=482756&in_page_id=6&ct=5

The Chancellor may scrap higher-rate income tax relief on pension contributions in next week's Budget, sources said last night. The move could raise between £5bn and £7bn a year for the Treasury, according to City estimates.
It could provoke a backlash similar to that triggered by Gordon Brown in 1997, who as the then Chancellor launched a £ 5bn-a- year raid on pensions.

Could effect a fair few people in the higher rate tax band....who are not neccesarily "rich".

tomterm8

The bottom line is, the budget deficit needs to be substantially reduced, and so people are going to have to pay more tax, and the government is going to have to spend less.

It's going to be an ugly budget.

Thrugelmir

Tax has to be raised in one form or another.

Higher relief does not mean that all high rate tax payers all save more, just that its subsidised.

Fairer to reintroduce the ability of pension funds to reclaim tax credits.

michaels

focking fock as they would say in iceland

Definitely a policy thought up by those on a secure final salary scheme.

Would really reduce the incentive to save for a pension - at least if you take the cash now you can decide where it goes and maybe put it somewhere safe from the Chancellor?

Don't forget with a pension the tax relief is only deferring taxation, so scrap the relief and in effect paying money in to a pension invites double taxation, first when you pay in it and then again when you draw your pension.

Thrugelmir

michaels wrote: »

focking fock as they would say in iceland

Definitely a policy thought up by those on a secure final salary scheme.

Would really reduce the incentive to save for a pension - at least if you take the cash now you can decide where it goes and maybe put it somewhere safe from the Chancellor?

Don't forget with a pension the tax relief is only deferring taxation, so scrap the relief and in effect paying money in to a pension invites double taxation, first when you pay in it and then again when you draw your pension.

Taking 25% out as a tax free lump sum is still an attractive option.

Remember also personal allowances are higher when you are older so its not all doom and gloom.

Dylanwing

Personally, I think that it is long overdue. Can anyone explain why high earners should get a better deal on pension contributions than the ordinary folk?

Thrugelmir

Dylanwing wrote: »

Personally, I think that it is long overdue. Can anyone explain why high earners should get a better deal on pension contributions than the ordinary folk?

None at all. Time to simplify the taxation system .......

donaldtramp

Better deal?
What about all the extra tax paid at 40%?

wymondham

Tax revenue has to go up to pay for the:

• Bank bailouts
• Motor Industry bailouts
• any other waste not listed above

.. expect this to be the first of many ways tax is clawed back. :rolleyes:

Old_Slaphead

wymondham wrote: »

Tax revenue has to go up to pay for the:

• Bank bailouts
• Motor Industry bailouts
• any other waste not listed above

.. expect this to be the first of many ways tax is clawed back. :rolleyes:

AND public sector pay rises
AND public sector index-linked final salary pensions

Optimist

wymondham wrote: »

Tax revenue has to go up to pay for the:

• Bank bailouts
• Motor Industry bailouts
• any other waste not listed above

.. expect this to be the first of many ways tax is clawed back. :rolleyes:

At some point Alistair is going have to stop letting Gordon do the budgets and become a big boy. The first thing that has to be done is cut public sector spending or at least stop wasting our money on flaming stupid projects.

Even labour MPs are muttering, Denis MacShane, Labour MP for Rotherham, wrote last year: "I do not know of a single Minister who privately does not despair at the waste of money on pointless projects, publications, or legions of press officers that add no value."

We don't have a Mrs Thatcher in the wings to make the unpleasant and unpopular decisions to get us out of this mess that Gordon has helped put us in and I fear David Cameron does not have the cojones to do it