The Times - Labour Plans Pension Raid

Andy_L

Cyberman60 wrote: »

Longevity would obviously have made a difference in the long run but removing 20% of growth in pensions via dividends year on year from 1997 to today has played a devastating part. The estimate in 1997 was that it would raise between 5 and 7 Billion a year in tax revenue. Compounded over 18 years that is colossal. eg: 5 Billion times 18 years = 90 Billion uncompounded !!!!

but the previous Tory cuts to ACT will have been compounded over even longer, making them even more colossal

jamesd

spartacus173500 wrote: »

"Personally I'd go with starting capped income drawdown as soon as possible before 5 April 2015. "
Can you point me to a previous simple thread how to do?

Tell the place that has your pension pot that you want to take a 25% tax free lump sum and place the remaining 75% of whatever portion of your pot you want into capped income drawdown.

redux

Cyberman60 wrote: »

Longevity would obviously have made a difference in the long run but removing 20% of growth in pensions via dividends year on year from 1997 to today has played a devastating part.

Where do you get 20% from?

You seem to have also mentioned or implied 5% and 10%

Cyberman60

redux wrote: »

Where do you get 20% from?

You seem to have also mentioned or implied 5% and 10%

20% was the marginal tax rate on dividends.

DaveMcG

Cyberman60 wrote: »

Longevity would obviously have made a difference in the long run but removing 20% of growth in pensions via dividends year on year from 1997 to today has played a devastating part. The estimate in 1997 was that it would raise between 5 and 7 Billion a year in tax revenue. Compounded over 18 years that is colossal. eg: 5 Billion times 18 years = 90 Billion uncompounded !!!!

I do hope you support the closure of public sector pensions as much as you support the unsustainability of private sector pensions.

Pension funds aren't entirely invested in UK equities and bond income is still tax free. Capital gains when moving from equities to cash or bonds in active investment strategy also tax free. Corporation tax was cut to provide some compensation as that provided scope for investment by firms increasing share prices.

So in short there is no way in which the change reduced growth by 20%.

The abolition of contracting out by the coalition will probably have a far greater effect than Brown's meddling.

Re public sector pensions. The system effectively works by the wage bill (ok I know that's taxpayers' money - don't interrupt!) of today's workers paying the pensions of retired workers. With contribution and retirement age tweaks (and no massive privatisations of the nhs) the system can continue indefinitely.

Abolishing the scheme would cost the taxpayer far more as wages would rise and the pensions accrued would have to be paid without any contribution from a public sector wage bill that would be higher than before. So all in all a huge burden for the tax payer.

redux

Cyberman60 wrote: »

20% was the marginal tax rate on dividends.

Some time earlier in this thread it was pointed out that rate was cut to 10% ...

- by Gordon Brown. At the same time

So your claims of the bad effects might be doubled, at least.

The above post points out that capital gains aren't impacted, nor income in other asset classes.

Cyberman60

redux wrote: »

Some time earlier in this thread it was pointed out that rate was cut to 10% ...

- by Gordon Brown. At the same time

So your claims of the bad effects might be doubled, at least.

The above post points out that capital gains aren't impacted, nor income in other asset classes.

So all done by Gordon Brown even after his advisors told him not to. Labour never have a clue as to the damage they cause. :mad:

robin61

coastline wrote: »

Pensions minister expects a cut in tax relief regardless whos in power...

http://citywire.co.uk/money/higher-rate-pension-tax-relief-for-the-axe-after-election-warns-webb/a790935

Well Webb would say that wouldn't he ? He would have reduced tax relief for 40% tax payers already if he could have got the Tories to support it.
If they reduce this then it isn't tax relief it is only partial tax relief. I have no problem with level playing fields at all - in that case we should all pay the same amount of tax. Bottom line if you get more tax relief it' s because you pay more in the first place.
One thing is for sure if the left get their way it will go. So don't vote for them.
If you earn 42k per annum you are hardly rich and tax relief still goes nowhere near to most of us being able to enjoy the sort of pension benefits enjoyed by the Public Sector including Webb and his mates.

spartacus173500

"Tell the place that has your pension pot that you want to take a 25% tax free lump sum and place the remaining 75% of whatever portion of your pot you want into capped income drawdown."

Thanks Jamesd - my pension pot is with AEGON. Do I have to stay with them or can I 'shop round' like an annuity?
Are there any potential differences from different companies and can I research these online or do I have to go to a 'broker'?

Thrugelmir

hugheskevi wrote: »

In comparison the RPI/CPI legislation change took £200bn out of pensions, so surely the message should be BEWARE of a Con/Lib Dem coalition?

£40bn a year?

Anyway DC schemes are around £375bn in deficit. So there's far bigger concerns for those who are members.