Pension income outside of tax/means test

gadgetmind

Teeonethousand wrote: »

i dont really trust either the government or the financial services industry to keep the playing field level

The Financial Services Industry is slowly being defanged but they are kicking and struggling every step of the way.

The government have pretty much declared war on private pensions and I expect this to escalate. I greatly fear that Labour will get into power and that anyone with the temerity to save for their old age will be made an example of at an early stage.

jamesd

Uncle_Stinky wrote: »

I though "sod it, I'll fund my own pension with savings, Tessas, then ISAs. ... This was going fine until I was made redundant at 60 and immediately afterwards had health problems. As a result, after 6 months JSA, having assets of over £16000, I was cast adrift to support myself from my "pension fund". After four years it is seriously depleted (just one year to go).

That's part of my reasoning for trying to get to the point where I could live indefinitely on savings and investments without relying on benefits: until you reach that point you can lose almost all of it to the means test. I'm there now so no longer have that particular worry.

Uncle_Stinky

Teeonethousand wrote: »

As for the trust trust thing - yes i am wary and i dont really trust either the government or the financial services industry to keep the playing field level and tbh i think that is healthy

Any government (especially a democracy) finds it difficult to penalise majorities or large minorities, however irresponsible they may be. Following the herd may be the less risky option however wrong it seems. (I was offered PPI some years ago but was self employed at the time so I declined it... Seems I should have let myself be mis-sold it)

latecomer

gadgetmind wrote: »

The government have pretty much declared war on private pensions and I expect this to escalate. I greatly fear that Labour will get into power and that anyone with the temerity to save for their old age will be made an example of at an early stage.

Any government that actively targets pensions will surely be committing political suicide - and it would also end up costing the state substantially more if people are not encouraged to provide for themselves in their retirement.

That said, when I get to retirement age I expect to get little, if anything, from the state pension so any pension at all would be a bonus

gadgetmind

latecomer wrote: »

Any government that actively targets pensions will surely be committing political suicide

Annual allowances keep coming down (sometimes retrospectively!), lifetime allowances keep coming down, the drawdown rules keep changing, statements keep being made that threaten 25% PCLS, ditto for further limiting tax relief on contributions, and reclaiming the tax on dividends in pensions is no longer possible.

The investment risk we're forced to take is bad enough without the constantly-changing politically-motivated legislative changes. The whole feeling is that you're constantly in HMG's crosshairs and risk having your retirement plans shot through the head at any moment.

All people want to do is save some of their income tax free now and then use it during old age, paying tax then where appropriate.

le_loup

Perhaps if people used pension contributions as pension contributions instead of tax saving schemes, such tinkering around the edges would not be necessary.
Just a thought!

grey_gym_sock

it's a bit ridiculous to complain about pensions getting worse, when it's not many years ago that you were forced to buy an annuity with a pension pot. costs have also fallen massively. overall, pensions are vastly improved.

there is a trend of rule changes, which i can see are a concern if you're putting a very very high proportion of your investments into pensions (and have quite a bit of money). if it worries you, put less in pensions. the only reason not to put less in is because pensions are extremely tax-efficient. in some situations, there's trade-off between increasing tax efficiency and reducing regulatory risk. it's a big exaggeration to characterize this as a general attack on pensions.

latecomer

but surely thats the incentive to make you provide for your future by ways of a pension. If they take away the tax benefit then people will look at alternatives

gadgetmind

grey_gym_sock wrote: »

it's a big exaggeration to characterize this as a general attack on pensions.

No, it's not a general attack, it's a very specific attack on private pensions. Interestingly some defined benefit pensions are being hit via collateral damage, which may end up being the one thing that limits the frequency and severity of these attacks.

Fingers crossed.

grey_gym_sock

it's not even a general attack on private pensions. it's just that, in some circumstances (i take it: including yours), there is trade-off between going for maximum tax efficiency and minimizing regulatory risk, which affects how much it makes sense to put into pensions.