taxation of pensions bill debate BBC Parliament

edited 29 October 2014 at 4:56PM in Pensions, Annuities & Retirement Planning
2 replies 697 views
SallyGSallyG Forumite
850 Posts
taxation of pensions bill debate BBC Parliament now

15.50 and it's over ......... nothing resolved.

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  • edited 29 October 2014 at 9:30PM
    jamesdjamesd Forumite
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    Part of the Furniture 10,000 Posts Name Dropper
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    edited 29 October 2014 at 9:30PM
    Interesting to see so much opposition focus on the change to £10,000 and the chance of employees putting money into a pension via salary sacrifice to avoid NI. It's perhaps worth noting that the previous government allowed £250,000 a year to be paid into a pension without having to pay NI on that money, while the new rules limit that to £10,000. The old rules capped the drawing rate via the GAD limit while the new ones don't have a limit but the GAD limit drawing rate is hardly a substantial limit for a person who may have had £1.8 million in their pension pot under previous government rules before hitting their lifetime allowance.

    Lots of protesting but I wouldn't be surprised if the NI cost is lower under the new rules than the rules as they were under the previous government.

    One quote I liked from Nigel Mills:

    "people might not want to do anything with their pots at age 66; they might stay in work until they are 70. They may want to use other savings or defer their pensions for a while. Do they want their pension scheme by default to start de-risking and reducing investment return 15 years before they want to retire? That would be disastrous for the pension pot"

    It seems to be increasingly common for pension plans to have such insanely long de-risking periods even though drawdown is likely to be a common choice that means the old fashioned annuity-style de-risking is completely inappropriate.
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