Despondent about Annual Allowance changes, other options to pensions?

ZiggerZagger

I saw an IFA yesterday and feel quite despondent now. I am divorced and in the divorce settlement my ex-h got to keep the pensions. As I earn significantly more than him (but only recently, not long term), I was deemed able to start saving again from scratch. I also had to buy him out of a portion of the house so I have a mortgage too.

The new annual allowance tapers down in the 16/17 year. My earnings are not predictable but if I do very well I could only have an annual allowance of £10k (you have to earn over £210k to get this).

I just read all the blurb about why they have done this and it was about inheriting wealthy parents homes and how doing this means they can raise the limit for this etc etc

My parents are alcoholics and have nothing. I'm not part of this posh family network that the Tories are on about. I'm a hard working single parent with a mortgage and kids to support and I happen to be doing quite well at the moment and I'm going to be penalised for that so that they can save some tax and use it to help the children of wealthy parents! Are they kidding me? I'd far rather they left the annual allowance alone and they introduced flat rate tax relief on the contributions or something along those lines (surely this is simpler too).

I don't want to overdo myself with debt as my circumstances can change v quickly but I might as well start looking at buy to let property or I suppose self investing in funds (which I assume I can just use to purchase an annuity as you would if you had a pension).

xylophone

I find it utterly astonishing that your solicitor permitted the type of divorce settlement you describe.

https://forums.moneysavingexpert.com/discussion/comment/68389943#Comment_68389943 post 19.

However, you have a very low interest rate on the mortgage and the opportunity to pay off the bulk of it within two years. You were referring to
savings of £200000 that could be used for this purpose.

You might even consider part repayments if these are penalty free.

You can contribute as much as possible to a pension ( you mentioned already having done so for this year).

You might consider maximum contributions to your children's JISAs as a way of providing for their university years and beyond.

With so high a salary, you can save enough to be totally mortgage free and build a comfortable emergency fund just in case you lose your (high reward/high risk) job?

kidmugsy

ZiggerZagger wrote: »

My earnings are not predictable but if I do very well I could only have an annual allowance of £10k (you have to earn over £210k to get this).

The attitude seems to be that people on £210k p.a. don't need tax incentives to save, they'd do it anyway. There's also the point that the tax incentives would come in part from taxes imposed on much poorer people.

But anyway, triple points for being able to combine a whinge about the high earners facing high taxes with a boast about being poor, really. If I thought your post was anything but a leg-pull I might weep quietly for you.

kangoora

The OP seemed to want to just place a comment, or a rant even?

I'm finding it extremely difficult to find any sympathy with their concerns. A LOT of people retire with less money in their pension pots than this person earns in a single year. Frankly, how anyone can whine about pension allowances when earning £200k+ a year just amazes me.

At my current age, even 1 year of that salary and I'd retire easily (looking at 2-3 at the moment at current projections). Even if I was younger I'd probably be able to retire after 5-7 years earnings and live very comfortably. It should be easily achievable to get investments earning £2.5k+ per month based on that salary.

Of course, if you have to have that £750k+ house, a new £50k Mercedes every 3 years, kids through private school, spend £10k+ on holidays twice a year, etc. then you aren't going to be able to retire very early. Not saying the OP does all these things, just pointing out that lifestyle choices dictate savings rate and expectations in retirement.