The Chancellor

EdInvestor

Paul_Herring wrote: »

I wish people would stop calling tax deferral "tax releif."

Actually it's the employers - and the life companies, which gobble up the tax relief in charges - which get the benefit of the tax relief , not the pensioners, as you say.

Hence the shrieking when GB removes some of it.

Curious_Moose

Bob Maxwell only screwed up one pension scheme. Also, jumped (literally) before he was pushed. Brown is an utter, smarmy disgrace.

Mr_Mumble

EdInvestor wrote: »

The Government already subsidizes company and private pensions to the tune of around 35bn pounds a year through tax and NI relief.

Thank the dear leader for only taking 42% of our money, though it should be 48% since the noble government shouldn't be promoting saving, much better for the proles to spend the money on ringtones and DVD players to keep the miracle economy(TM) chugging along.

Yet there are 3m households eligible for means-tested pension credits because they are so poor.

Means-tested pension credits taper out at a far higher level than the basic state pension. Someone who hasn't worked a day in their life is entitled to the same amount from the state as someone who has worked all their adult life in a poorly paid job. There are plenty of good reasons Brown's Britain is being compared more and more to the Stalinist USSR you know!

Plus you will only need 30 years of contributions to get the full basic state pension, instead of 39 or 44.

Of course the erosion in value of the state pension hasn't paid for this...

PLUS the state pension will be re-linked to earnings.

Gordon is going to start treating those who've worked to get the state pension as well as those who haven't and live on pension credits, oh how lucky the workers are, praise Gordon!

Is the pension system now better and fairer than it was 10 years ago?

You betcha. Thanks to Gordon Brown.

Ed Balls, is that you?!
:rotfl:

wotsthat

Someone who hasn't worked a day in their life is entitled to the same amount from the state as someone who has worked all their adult life in a poorly paid job. There are plenty of good reasons Brown's Britain is being compared more and more to the Stalinist USSR you know!

My knowledge of history isn't as good as your's but I'm fairly confident that someone who didn't do a days work in Stalin's Russia didn't have a state pension to look forward to!

We can all point at people who drift through life and seem to do ok out of the system. I think it reflects well on any society that supports people who are old, infirm, and of course, lazy.

Mr. Mumble you make it sound as if the layabouts can have a great life not working and then retire in luxury. These sort of arguments sound like newspaper headlines which, in my opinion, do not inform but actually damage people's desire to save because they breed apathy.

Instead of packing up work I think I'm going to take a 'chance', keep working (until I'm 66!) and saving until retirement (fingers crossed). Along the way I'll continue to hear about people milking the system but it won't stop me.

I did some quick calculations and found the tax bands, rates & pensions from the budget of 1996/97. There are some websites that will calculate how these have been affected by inflation to compare like with like - I'd rather be a pensioner today than in 1996. The retired people I know all seem to be better off as well.

Bob Maxwell only screwed up one pension scheme. Also, jumped (literally) before he was pushed. Brown is an utter, smarmy disgrace.

Curious Moose I must commend you on your valuable contribution. One point though - Robert Maxwell STOLE from a pension fund for his own gain. Gordon Brown raises taxes to spend elsewhere in the economy. We may not agree with how it is raised (or spent for that matter) but you do get the opportunity to vote for someone else if you think they can do any better.

Fulham_Mark

From next week your tax relief on private pensions drops by 10% - because of the 2p tax "cut" in the budget.

Effectively this is a 2.4% tax rise as you now need to pay and extra £2.40 to get the same contribution as you did this week. The £2.40 you've lost has been taken by Golden Brown.

Another "hilarious" prank mentioned in the FT this weekend is the £8bn fund that Golden Brown said he was allocating to help pensioners who's pensions have collapsed. This is actually £1.7bn. the other £6.3bn is the interest that £1.7bn might earn over the next 60 years!
This is an accounting trick or "loop hole" - just the sort of thing that Golden Brown tries to prevent us from doing.

The public sector have well-educated Unions who have successfully campaigned against cuts to their pensions. Golden Brown has backed off everytime he's tried to cut them.
When we retire there will be a huge gap between the haves in the public sector and the have-nots who pensions were sneakily reduced.

Andy_L

Fulham_Mark wrote: »

From next week your tax relief on private pensions drops by 10% - because of the 2p tax "cut" in the budget.

Swings & roundabouts - people with pension's in payment get more in their pocket - are you suggesting we should never have a cut in tax rates because of pension contributions?

Fulham_Mark wrote: »

Another "hilarious" prank mentioned in the FT this weekend is the £8bn fund that Golden Brown said he was allocating to help pensioners who's pensions have collapsed. This is actually £1.7bn. the other £6.3bn is the interest that £1.7bn might earn over the next 60 years!
This is an accounting trick or "loop hole" - just the sort of thing that Golden Brown tries to prevent us from doing.

Its the same method used to demonstrate the public sector pension black hole is £100 billion

Fulham_Mark wrote: »

The public sector have well-educated Unions who have successfully campaigned against cuts to their pensions. Golden Brown has backed off everytime he's tried to cut them.

Except of course for new-entrants to the civil service who join a worse scheme & Local Gov who've lost rule 85

Bean_Counter

Seemed obvious at the time that the less money you pay into a pension scheme, the worse it will perform in the long run. It was just not deemed newsworthy enough at the time, so no big uprising.

Now newsworthy, so big uproar.

At the end of the day, you can all ponder on it when you cast your vote.

If you don't vote, don't complain.

Paul_Herring

Fulham_Mark wrote: »

From next week your tax relief on private pensions drops by 10% - because of the 2p tax "cut" in the budget.

Lets put that little piece of hyperbole into perspective shall we?

The change in tax *deferral*[1] means that whereas before, you needed to contribute £2,808 of your net pay to gain £3,600 in your pension pot, you now need to contribute £2880.

A whopping increase of £78 of net pay. But that's not all...

Note that this is an increase of *net* pay - if you're earning, you have no net gain/loss since £3600 of your gross pay is going into the pension, both before and after.

Or put another way, the income tax on £3,600 before was £792. After it was £720. A saving of, wait for it, £78. Well you might as well stick that extra cash into your pension, since you didn't miss it before.

Effectively this is a 2.4% tax rise as you now need to pay and extra £2.40 to get the same contribution as you did this week. The £2.40 you've lost has been taken by Golden Brown.

Rubbish. It's not a tax, and it's not an increase in (gross) payments. You merely put in the saving made by the decrease from 22% to 20%.



[1] it only becomes tax 'relief' if you won't be paying tax on the income when paid as pension.

Bean_Counter

From the little I recall of ten years ago, I think you have all got the "tax relief" wrong.

The main thrust was that companies paid dividends net of a tax credit, which was paid quarterly to the Inland Revenue. In the good old days, pension funds could recover the tax credit to make the dividend they receive (which after all is a fair chunk of their income). Then they couldn't.

Surprise - pension funds worse off.

benood

I think the reason it has taken 10 years for the dividend tax credit to become an issue is all to do with the fact that GB would make "an effing dreadful PM" as someone said, and very little to do with the crafty ploy in 97 which put £5bn pa into Goverment coffers so it could be spent wisely on our behalf.

Tbh it was a political masterstroke - very little short/medium term pain, so what if it would be a disaster in the longer term, few of "our" voters are affected anyway...

twitch, ugh, bite nails, pick nose, och, Tony when you off??? Don't look at me it was the CBI.