Election campaign kicks off

Cyberman60

The fact is that pensioners have paid into the system for decades in tax and national insurance, thus making massive NET contributions. Benefit breeders and other scroungers etc will probably never make a NET contribution over their lifetimes.

Welfare has to be cut to reduce Labour's 160 Billion annual deficit legacy so it makes sense to cut from the least contributing members of society (in all probability those that voted for the deficit by voting Labour, so they in fairness should pay!!) , and also it will also encourage them out of state dependency and to look for work, as it already appears to be doing. :T

neverdespairgirl

N1AK wrote: »

People have dismissed this pension change as being a drop in the ocean and it isn't, but even if it was spending it on a benefit for the wealthy while putting the poor through further austerity is unfeeling even by conservative standards.

I don't get this "more austerity" and "further austerity" people are talking about. THis government has been borrowing and spending hand over fist, and talking about austerity.

Cyberman60

neverdespairgirl wrote: »

I don't get this "more austerity" and "further austerity" people are talking about. THis government has been borrowing and spending hand over fist, and talking about austerity.

They have been cutting welfare spending and public sector wages for five years in order to reduce the annual deficit from 160 Billion pounds, and you have not noticed. :rotfl:

jem16

Cyberman60 wrote: »

55% tax is in no way fair and is a disincentive to save for retirement when you take into account pension administration fees over the lifetime of that investment. This wouldn't necessarily all be tax free anyway as there is an inheritance tax band of around 350K methinks.

Most pension funds fall outside the estate at the moment so IHT doesn't enter into it.

Basically the pension fund will be subject to marginal income tax rates as opposed to 55% tax.

wotsthat

Graham_Devon wrote: »

I would normally agree with freezing benefits in order to save money. But when all of that money is then given away in a tax cut to the wealthy, it just seems rather silly.

Nothing's being given away. Under the new pension rules it's effectively a voluntary tax anyway - there's almost no need to pay it.

Quite shrewd really. Votes being purchased that won't cost a penny.

Cyberman60

wotsthat wrote: »

Nothing's being given away. Under the new pension rules it's effectively a voluntary tax anyway - there's almost no need to pay it.

Quite shrewd really. Votes being purchased that won't cost a penny.

... and also good for the economy as people are taking this windfall and spending it, as a friend of mine has, and that does in effect mean tax is paid in VAT etc.

Daniel54

Thrugelmir wrote: »

One side effect may be to diminish the attractiveness of BTL as a source of retirement income.
.

I agree that for anyone likely to be concerned about IHT,these changes substantially increase the attractiveness of pensions over BTL as an investment for retirement

I wonder if we will also see earlier downsizing ,or BTLs being sold,in order to maximise pension contributions while there is still earned income available for tax relief.

thequant

N1AK wrote: »

This is exactly what has pushed me from supporting the current government to being fed up with conservative politics. The blatant focus on buying the loyalty of their core voters while being ruthless in changes to the young is unacceptable to me.

Are you a couple living in a 3 bed council house, in an area with no smaller council properties available? Tough luck scrounger, we're taking some benefits back!

Are you a very wealthy pensioner? Congratulations, we'll improve your pension in relative terms, give you additional tax breaks like bigger ISA allowances, make it easier to pay less tax when passing money on and make sure you keep that free bus pass!

People have dismissed this pension change as being a drop in the ocean and it isn't, but even if it was spending it on a benefit for the wealthy while putting the poor through further austerity is unfeeling even by conservative standards.

Erm No,


Anyone benefitting from the pension changes by definition of having a pension will have worked to get that pension pot.


For them to have worked, they would have paid taxes.


Todays announcement is about giving them a bit back of what they have paid in.


However on the other hand, the baby breeding scrounger in the 3 bed council house will have paid in naff all.


Let them eat cake and let the pensioners have their bus passes.

Thrugelmir

IveSeenTheLight wrote: »

Explain this further, why?

Because the fund remains tax free until it's crystallised. One key fundamental of investing is the effect of compound growth when reinvesting income.

Thrugelmir

IveSeenTheLight wrote: »

A 15% - 35% reduction in this rate may be questionable as to whether it is a minimal cost to the exchequer.

From next April it will possible for people to drawdown as much as they wish. So the tax take will also increase in this regard.