Should I set up a SIPP?

TH1878

Been thinking about this for a while...

As the UK becomes more devolved, each constituent country will be given powers to set its own income tax rate. However, pension tax relief is set at a National level so there will undoubtedly be a disparity in the future.

If, for example, Scotland decides to levy basic rate tax at 18%, we will be in a position where the Scots get BRT relief at 20% - not a situation that will be palatable to English, Welsh or NI voters!

Now we're definitely on the path to devolved government, I can't see any other way forward than switching to a flat rate tax relief system of maybe 25 or 30%.

In terms of salary sacrifice, a similar situation will occur so you can bet your bottom dollar that legislation will follow.

I hope I'm wrong.

jamesd

It may not be palatable to some but English and Welsh students pay university tuition fees to fund the grants to universities, while Scottish students don't, yet the Scottish universities still get the same grants from the same source.

My work lets me live and work anywhere in the UK that I choose. If a particular region of the UK wants to compete for me living there by giving me a better pension deal I think that's useful competition between the regions.

Such differences are eminently possible, since US states and even cities have different sales tax and income tax levels, with some like NY even imposing an income tax on non-residents who work in the city but don't live there.

TH1878

jamesd wrote: »

It may not be palatable to some but English and Welsh students pay university tuition fees to fund the grants to universities, while Scottish students don't, yet the Scottish universities still get the same grants from the same source.

My work lets me live and work anywhere in the UK that I choose. If a particular region of the UK wants to compete for me living there by giving me a better pension deal I think that's useful competition between the regions.

Such differences are eminently possible, since US states and even cities have different sales tax and income tax levels, with some like NY even imposing an income tax on non-residents who work in the city but don't live there.

Agreed but this is something that successive Governments have been looking at for a while - this might be the catalyst for the change.