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RenovationMan

grizzly1911 wrote: »

You never know when any of those percentages will be changed.

I know you can't plan on that basis but perhaps you ought to factor some of them into your thinking.

As I said in an earlier post, the removal of higher rate tax relief and the 25% tax free lump sum has been touted for years. If they do indeed remove it then I'll adapt. I have been a higher rate tax payer for 15 years now, so those contributions are safe. It could be another 5 or more years before they get around to removing the tax rebate, which means I will have 20 years of tax rebates already stored in my pension. At least I will have 'made hay' whent he sun shines.

If they removed the tax incentives from pensions, I would simply stop contributing to them and put my money elsewhere. Its not rocket science. Though I'd still remain in my company final salary scheme as it would be unaffected (from my standpoint) by changes to the tax thresholds.

grizzly1911 wrote: »

I wouldn't be surprised if the relief becomes less than the actual tax take, to benefit from your gains.

No idea what you're going on about here. Sorry.

grizzly1911 wrote: »

If the soon to be pensioners are going to have to pay more don't see why that progression shouldn't continue.

No doubt there will be some up font contribution required, to your possible long term care in old age, which you might not even benefit from either.

What a rosy future glad I'm that bit older.

Sorry, again I have no idea what you're going on about here. Odd that you're glad you are old though, will you be even gladder when you're 'safely' in your grave and away from all the worry of life?

chucknorris

RenovationMan wrote: »

As I said in an earlier post, the removal of higher rate tax relief and the 25% tax free lump sum has been touted for years. If they do indeed remove it then I'll adapt.


Odd that you're glad you are old though, will you be even gladder when you're 'safely' in your grave and away from all the worry of life?

I'm not even going to take the tax free lump sum on my teacher's pension, at a conversion rate of only £12 lump sum for every £1 of pension sacrificed, I would rather have the pension than the lump sum.

RenovationMan

chucknorris wrote: »

I'm not even going to take the tax free lump sum on my teacher's pension, at a conversion rate of only £12 lump sum for every £1 of pension, I would rather have the pension.

I'm starting to think that way too, especially as I'm thinking of putting my personal pension into drawdown rather than buying an annuity - I will already have a secure income from my company FS pensions and so I can 'dabble' with the personal pension without too much risk.

chucknorris

RenovationMan wrote: »

I'm starting to think that way too, especially as I'm thinking of putting my personal pension into drawdown rather than buying an annuity - I will already have a secure income from my company FS pensions and so I can 'dabble' with the personal pension without too much risk.

Our pension is really just a hedge against living too long that will allow us to spend capital, without fear of running our money down too far then having another unexpected decade to get by on. We really don't need any more capital so the lump sum is of little use. I would only take it if it represented value (or I had a serious health issue) and at the ratio of £12 lump sum to £1 pension it is not a difficult decision not to take the lump sum.

I don't know much about drawdown although we only have a small defined contribution pension (about £150k between us). But I might be tempted to buy more if I thought the drawdown method was advantageous. Are the fees higher for this type of pension income?

System

chewmylegoff wrote: »

Except no one has "paid into it" and the some government will just have to admit that was all a lie. .

Ah, another misselling scandal coming up.

People who followed government advice to pay extra NI to make up for any missed years credit would have a good case.

Joke:)

kabayiri

I think we have to look at the whole topic of retirement in a holistic sense, and work out how people can move into 'easier' roles as they get older to sustain a modest lifestyle.

Politically, the pensioner voting group will be extremely significant in years to come, and this group is growing in size. How does any future populist government confront this group to implement pension savings?

There is already a 4:1 voting bias for the over 65s compared to the youngest voting block. That's a powerful lobbying force.

RenovationMan

chucknorris wrote: »

Our pension is really just a hedge against living too long that will allow us to spend capital, without fear of running our money down too far then having another unexpected decade to get by on. We really don't need any more capital so the lump sum is of little use. I would only take it if it represented value (or I had a serious health issue) and at the ratio of £12 lump sum to £1 pension it is not a difficult decision not to take the lump sum.

I don't know much about drawdown although we only have a small defined contribution pension (about £150k between us). But I might be tempted to buy more if I thought the drawdown method was advantageous. Are the fees higher for this type of pension income?

My pension is already in a SIPP and I think to put it into drawdown there will be a charge, but then I guess I just manage the fund as I do now. Here is a link to some further information:

http://www.gerardassociates.co.uk/pension-drawdown-prior-5th-april-2011-known-unsecured-pension

I've not researched drawdown as much as I have my other investments because the event is over 20 years away, and as people are quick to point out, legislation could change wildly in that time. I'm considering options, but not banking on them just yet (as I'm sure these people will be relieved to hear).

CLAPTON

kabayiri wrote: »

There is already a 4:1 voting bias for the over 65s compared to the youngest voting block. That's a powerful lobbying force.

rather a bizarre way of expresssing it; comparing the age range 60 to 100 with what exactly?

Graham_Devon

Loughton_Monkey wrote: »

OK, I'm not saying it's easy, but we really must move towards understanding that what someone spends is very largely choice. Once they build up a lifestyle (100% of earnings) - through their own choice - of course they are then 'locked in' and their rent/mortgage, plus bills, car payments, plus modest grocery bills..... add up to 100% of earnings. But they didn't have to get themselves into that position. They did so because of greed or ignorance.

I can't say I can agree with this.

If you need somewhere to live, which is a fundemental need, not a choice, then it's a cost you cannot avoid.

Sure, people can do away with some things, but the cost of council tax and housing you simply cannot avoid. Would you seriously tell me that it's my fault for not saving for a pension as I "chose" to put a roof over my families head?

RenovationMan

Graham_Devon wrote: »

I can't say I can agree with this.

If you need somewhere to live, which is a fundemental need, not a choice, then it's a cost you cannot avoid.

Sure, people can do away with some things, but the cost of council tax and housing you simply cannot avoid. Would you seriously tell me that it's my fault for not saving for a pension as I "chose" to put a roof over my families head?

Get a better paid job, or a part time job to raise your income. If you have kids then make sure you are getting your CB, CTC and WTC. If your income is so low, then you can have your council tax reduced.

This link provides details of the benefits you are entitled to if you have a low income:

http://www.turn2us.org.uk/benefits_search.aspx

WTC and CTC actually increase if you are contributing to a pension. They deduct pension contributions from your income before they make the calculation to see what you are entitled to.

EDIT: If you go into that benefit checker and put that you live in a shared ownership home it tells you that you could be entitled to mortgage and rent assistance:

http://www.turn2ushelp.entitledto.co.uk/viewhelp.aspx?sid=13&ctyid=0&helpfile=sharedownership