Balls on Pensions

Perelandra

Wonderful. He's at it again:

http://www.thisismoney.co.uk/money/markets/article-2430027/ALEX-BRUMMER-Ed-Balls-declares-war-pensions.html

Loughton_Monkey

Perelandra wrote: »

Wonderful. He's at it again:

http://www.thisismoney.co.uk/money/markets/article-2430027/ALEX-BRUMMER-Ed-Balls-declares-war-pensions.html

This is not particularly new. I think higher rate pension relief has been mooted for the chop for quite a while, by both parties.

I'm wondering if "Bummer" [the journalist fully understands things. He's talking about it being aimed at the 'Fred the Shred' type, but of course the tax relief at any rate has been capped at £50K per annum (plus a lifetime allowance) for a long time.

Personally I did rather well out of this in the 90's. Stuffed loads into pensions and got 40% relief. Now retired, I have easily engineered keeping just under higher rate tax and so only paying back 20% tax on 75% of it.

Mind you, I'm not sure many people are 'savvy' enough to do this. There are lots of people just creeping into HR tax, admit they 'can't afford' to save enough in pension, but would be very well advised simply to put all their excess earnings into pension until the pips squeek.

lvader

It wouldn't affect the highest earners since tax relief is already capped, it would only affect middle income earmers (as usual).

Linton

The author seems to know nothing about pensions, or perhaps darent allow his and his employer's prejudices to become tainted by the facts.

He starts off by saying that the removal of the refund of the (non-existant) tax paid on dividends caused the demise of the final salary pension. Do you think he really believes that?

zagfles

Loughton_Monkey wrote: »

This is not particularly new. I think higher rate pension relief has been mooted for the chop for quite a while, by both parties.

I'm wondering if "Bummer" [the journalist fully understands things. He's talking about it being aimed at the 'Fred the Shred' type, but of course the tax relief at any rate has been capped at £50K per annum (plus a lifetime allowance) for a long time.

Yes but the rate of that relief is the issue. High earners now get 45% relief on their £50k contributions, cutting that to basic rate will more than halve their tax relief.

zagfles

Linton wrote: »

The author seems to know nothing about pensions, or perhaps darent allow his and his employer's prejudices to become tainted by the facts.

He starts off by saying that the removal of the refund of the (non-existant) tax paid on dividends caused the demise of the final salary pension. Do you think he really believes that?

It wasn't the only factor but it was certainly one of them.

Linton

lvader wrote: »

It wouldn't affect the highest earners since tax relief is already capped, it would only affect middle income earmers (as usual).

According to the bastion of truth, the Daily Mail, higher rate tax is paid by 1 in 6 taxpayers. So the claim that middle income earners would be affected seems to be stretching the definition of "middle" a bit.

ukcarper

lvader wrote: »

It wouldn't affect the highest earners since tax relief is already capped, it would only affect middle income earmers (as usual).

As less than 20% of workers earn more than £40k not middle earners I would suggest.

Linton

zagfles wrote: »

It wasn't the only factor but it was certainly one of them.

Really?? Final salary pensions were well on their way to being phased out from the early 1990s if not before. One key factor was increased life expectancy.

zagfles

Linton wrote: »

According to the bastion of truth, the Daily Mail,

:rotfl:sorry I didn't see the point in reading any further;)

zagfles

Linton wrote: »

Really?? Final salary pensions were well on their way to being phased out from the early 1990s if not before. One key factor was increased life expectancy.

Is this another Daily Mail fact :rotfl:

Most large private sector employers ran final salary schemes, available to new employees, up till the late 90's. Now hardly any do.