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Telegraph - 25% Under threat.
Comments
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Assuming you do not have any of the Protections the penalty tax for benefits in excess of the LTA depends on how you take the benefit.
For taking cash in excess of the LTA its 55% tax.
For taking pension in excess of the LTA it is 25% tax (plus of course the pension is then subject to PAYE).0 -
I think the TFLS is a great idea to encourage people to pay into a pension. The more they pay in the more they can take out.
Otherwise, unless your a HRT then you might as well pay into an ISA, where you can take the LOT out and you could blow it ALL on a round the world cruise and have no pension provision.
At least with the TFLS it means that 75% has to stay as a pension.
Yes but you could allow the first 25% of the pension not to be subject to PAYE and still get the tax benefits.0 -
The tax free cash sum is actually a really bad idea.
It's a key part of my pension planning. When I get this money I will invest most of it for future income but use the rest to bridge me until state pension age.
As we're all grown ups, such freedoms are a good thing.I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.
Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.0 -
Yes but you could allow the first 25% of the pension not to be subject to PAYE and still get the tax benefits.
True, but there is going to be an increasing use (I suggest) of the TFLS to bridge the gap between retirement and the State Retirement Age. But then maybe governments won't want to encourage that either.Free the dunston one next time too.0 -
gadgetmind wrote: »It's a key part of my pension planning. When I get this money I will invest most of it for future income but use the rest to bridge me until state pension age.
As we're all grown ups, such freedoms are a good thing.
If everyone we're indeed all grown up then perhaps people would save enough for their own retirement.
Notwithstanding the government coffers are in debt and as anyone in pensions know's governments have frequently taken whatever they can out of them because the public do not seem to care.0 -
Before the last election Osborne said that a Conservative government would increase the IHT allowance to £1M. Labour's response was to allow a widow's estate to claim her/his spouse's unused allowance.
using a spouse's IHT allowance came in in 2007. not very close to the election.0 -
grey_gym_sock wrote: »using a spouse's IHT allowance came in in 2007. not very close to the election.
Not close but done entirely in a bidding war with the election in mind. Which was the point after all.
You must also remember that there was much talk of the election being held well before May 2010. Brown funked it, in the end.Free the dunston one next time too.0 -
If everyone we're indeed all grown up then perhaps people would save enough for their own retirement.
Ah, well, that's the thing about being all grown up, standing on your own two feet, and making decisions for yourself. Most people make good decisions while a fair few make truly stupid ones. In our attempts to protect the latter we shouldn't be shackling the former.I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.
Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.0 -
gadgetmind wrote: »Ah, well, that's the thing about being all grown up, standing on your own two feet, and making decisions for yourself. Most people make good decisions while a fair few make truly stupid ones. In our attempts to protect the latter we shouldn't be shackling the former.
I really do agree with you in principle. However, those "fair few" making stupid mistakes are rather large in quantity. And you know how British society is now. If they were allowed to do nothing or draw their pension as a lump and waste it and then have no money in retirement then they would have to be paid benefits as it would be so unfair for them not to have a retirement income.....I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0 -
If they were allowed to do nothing or draw their pension as a lump and waste it and then have no money in retirement then they would have to be paid benefits as it would be so unfair for them not to have a retirement income.....
Which is why the new flat rate state pension is such a great idea. £144 is what you get to from the state and the rest is down to you, chum!
And note I wasn't arguing that people should be able to get 100% of their pensions as a lump sum, just that the 25% is (was?) a great idea. Yes, some will blow it on ephemera, but I'll fight tooth and claw for their absolute right to do exactly that if they so choose.
Just as with free speech, these freedoms are worth fighting for, even if you don't always agree with how everyone uses their freedom.I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.
Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.0
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