Balls on Pensions

CLAPTON

Loughton_Monkey wrote: »

As you say, not giving the 'marginal' rate does create problems.

But for final salary schemes, there is a 'formula'. Something about 16 times your annual increase in entitlement. This is well understood and already dealt with in 'policing' the £50K limit etc. so I don't think it makes FS schemes any more complicated.

But capping relief at 20% will probably only take, say, another 10,000 HMRC staff. All.. er... on Final Salary schemes!

people in final salary schemes are employees

so it will be employers who have to work out the correct tax so no extra HMRC staff

grizzly1911

Thrugelmir wrote: »

Well it did cost UK pensions £5 billion a year. Not only did it impact final salary schemes but personal pensions as well. Resulting in the crisis we have today. Where there's a generation heading towards retirement with insufficient provision.

I am not sure it is just a generation.

Very few will be able to afford "sufficent" pension going forward, regardless of auto enrolment or relatively high levels of contribution.

zagfles

CLAPTON wrote: »

presumably if brown hadn't made that 5 billion raid on pension starting in 1977 then the national debt would be 80 billion higher and the deficit would also be 80 billion extra too.

Depends whether they'd have just borrowed the shortfall, or just not spent as much eg not increased the welfare budget so much.

funny how the current lot haven't reversed that raid... they have been in power three + years

Because when the govt changes they rarely reverse all the things they whinged about in opposition. Besides it's far too late to save final salary schemes.

I remember before the 1997 election, the Tories were cutting the married couples' allowance, additional personal allowance, and MIRAS. Labour whinged about every cut. Then when Labour got in, they carried on with the cuts, evetually abolishing all 3, and, wait for it, the Tories whinged about every cut!

It's the state of our politics. Oppositions oppose even if they agree with the govt. The EU budget vote was classic case.

CLAPTON

zagfles wrote: »

Depends whether they'd have just borrowed the shortfall, or just not spent as much eg not increased the welfare budget so much.

Because when the govt changes they rarely reverse all the things they whinged about in opposition. Besides it's far too late to save final salary schemes.

I remember before the 1997 election, the Tories were cutting the married couples' allowance, additional personal allowance, and MIRAS. Labour whinged about every cut. Then when Labour got in, they carried on with the cuts, evetually abolishing all 3, and, wait for it, the Tories whinged about every cut!

It's the state of our politics. Oppositions oppose even if they agree with the govt. The EU budget vote was classic case.

indeed yes,

I wouldn't have expected the conservatives to reverse the (unreclaimable) tax on dividends because they know it's a reasonable tax.
They themselves are squeezing the pension tax breaks and I'm sure higher rate tax rebate will disappear soon and the life time allowance will continue to decrease.

chewmylegoff

CLAPTON wrote: »

people in final salary schemes are employees

so it will be employers who have to work out the correct tax so no extra HMRC staff

If anything HMRC could probably scrap some staff as they wouldn't need to deal with all the claims for tax rebates on SIPP contributions by higher rate tax payers.

chewmylegoff

CLAPTON wrote: »

indeed yes,

I wouldn't have expected the conservatives to reverse the (unreclaimable) tax on dividends because they know it's a reasonable tax.
They themselves are squeezing the pension tax breaks and I'm sure higher rate tax rebate will disappear soon and the life time allowance will continue to decrease.

I'm not so sure it's because they consider it "reasonable". Probably more to do with the fact that it they would likely have to raise direct taxation to pay for it, which people would immediately feel the effects of, whereas they won't notice the impact on their pension is for many years. Voters being voters are therefore unlikely to be supportive of the reintroduction of the tax.

ukcarper

lvader wrote: »

Yes. You are confusing average income with middle income.

I'm saying only the top 30% of earners earn more than £30k in fact only 10% earn more than £48k. How are you defining middle income.

CLAPTON

chewmylegoff wrote: »

I'm not so sure it's because they consider it "reasonable". Probably more to do with the fact that it they would likely have to raise direct taxation to pay for it, which people would immediately feel the effects of, whereas they won't notice the impact on their pension is for many years. Voters being voters are therefore unlikely to be supportive of the reintroduction of the tax.

by reasonable I mean that they will continue to erode the tax advantages of pensions and a tax on dividends doesn't seem unreasonable (unless you harp on about it 20 times a year for 13 years but never promise to repeal it.)

zagfles

CLAPTON wrote: »

by reasonable I mean that they will continue to erode the tax advantages of pensions and a tax on dividends doesn't seem unreasonable (unless you harp on about it 20 times a year for 13 years but never promise to repeal it.)

In a way they are partially repealing it by cutting corporation tax rates. ACT was after all just an advance payment of corporation tax, so cutting corporation tax rates has the same effect. Though of course they haven't cut it by as much as 20%.

lvader

ukcarper wrote: »

I'm saying only the top 30% of earners earn more than £30k in fact only 10% earn more than £48k. How are you defining middle income.

The same as most people would, middle of the range of incomes, not the average.