MSE News Discussion: Calls for UK savings to be radically simplified

Paul_Herring

D1zzy wrote: »

Should've said already retired -with current additional income from savings and investments - so the opportunity to shift everything at 90K a year into a tax free option still sounds pretty good.

Ahh - you think that they'll simplify it so much they'll let pensioners at it?

So much trust...

I wouldn't put it past them to

a) suggest an upper limit on the ISA contributions. Say £10,200. Maybe even increase this limit annually with some indexation figure or other. In line with their other suggestions, this isn't different to what's happening today.

b) suggest not allowing anyone who's drawing a pension (public or private) to add further to any pension fund. Of course, this will be to simplify things - there's nothing simple about both withdrawing a pension and also saving for another one. Far too complicated for the proles to get their heads around.

But I'm an optimist...

ed123_2

...it's more about pensions than saving...so you can transfer your £10k pa ISA's (cash??) into a pension....no thanks......it would'nt help the pension industry with thier fat fee's and rob us of our existing £5,200 cash isa allowance...surely not....

D1zzy

Paul_Herring wrote: »

Ahh - you think that they'll simplify it so much they'll let pensioners at it?

...age discrimination is now a sin - so I see "a one size fits all" option ..........................well we can live in hope

Paul_Herring

ed123 wrote: »

...it's more about pensions than saving...

There's a difference? No, seriously.. You think there's a substantial difference?

so you can transfer your £10k pa ISA's (cash??) into a pension....no thanks......

You'd be a fool to have any long term savings in any sort of cash account. Inflation would eat away at it over the long term, let alone in the short term during periods like the moment.

it would'nt help the pension industry with thier fat fee's and rob us of our existing £5,200 cash isa allowance...surely not....

And the banks, with their 0.1% (or, at best, still sub-inflation) cash ISA's aren't doing exactly the same? I'm failing to see a difference between your perception about pensions (which is wrong) and the reality with cash savings.

Yes, I have a pension fund. And S&S ISA's. And no, I don't work anywhere near any financial institutions.

Paul_Herring

D1zzy wrote: »

...age discrimination is now a sin - so I see "a one size fits all" option ..........................well we can live in hope

They'd be sure to suggest similar legislation that prevents the majority of people taking their private pensions before the age of 55 these days.

Yours, ever the optimist..

Milarky

This looks like a decidedly minority pitch. Savings up to £45K pa? Who are these people (among the general population)?

The simplest thing to change is the tax relief on pension contirubitons. Limit it to 20% and cap the amount that benefits to (say) £5000 pa (i.e. £1000 pa limited relief) I'd go a bit further and give £400 for the first £1000 [40%] and £600 on the next 4K [15%]. You can hear the squeals of protest but anyone who can save as much £4000 pa [from net income] on a pension is not going to be deterred by reduced tax relief are they?

Then scrap that requirement to purchase an annuity at any stage. Instead we could have the Aussie/NZ approach (they are hardly 'third-world' are they?) making access to the pot contingent on more circumstances than just hitting certain age.

The 'personal accounts' idea using 'auto enrolment' (Adair Turner got a peerage for stating the obvious!) simply to trick people into saving is going to get nowhere unless these small savers are told the truth from the outset - like the name for instance! Instead, using tax relief more sparingly - as with cash ISAs, which are a run away success* - experience shows that must be a better way to go

*someone is going to point out now that cash ISAs are 'poor value' [true] and that a lot being saved there is by the very groups that would save their cash anyway [also true] and the net effect on savings is bound to be overstated [true again] because people are moving money their from elsewhere because of the perceived perks. The great merit of cash ISAs is their relative simplicity - something pension products will always lack.