Millionaires... how?

gadgetmind

grey_gym_sock wrote: »

i do have sympathy with the amount of effort you're ending up putting into understanding changes in taxation of pensions, when you could be thinking about something more productive

I can easily do both.

however, it's obvious that pensions are very tax efficient for you. the effort is worth the pay-off.

Diminishing returns apply. and TBH it's HMG who are losing more than me. By dropped from 5 days a week to 4, I reduce my tax bill from £50kpa to £30kpa and get £10k pa more into my pension. Note that this is as a result of HMG introducing changes designed to raise more tax. Notice anything?

perhaps using pensions is more like experiencing an earthquake in tokyo.

As it happens, I've experienced a couple of earthquakes in Yokyo. The building was fine but I did spill some sake.

grey_gym_sock

gadgetmind wrote: »

There are other alternatives. One of these is to work less, and pay massively less tax, which is what I'm doing as of next April.

but AIUI you're quite near to having "enough" to give up paid work. so this is presumably a matter of phasing out work in a different way, i.e. go to 4 days a week, but keep going a bit longer than you would have done on 5 days.

in any case, should the aim of the government be to encourage everybody to keep working as long as possible, in order to maximize the tax take? i don't think so. a bit of work/life balance is a good idea.

and when you do stop working, does that mean there is 1 less person working? or does it mean that several ppl get promoted, and 1 extra entry-level job is created? if it's the latter, it will have a broadly neutral effect on the tax take.

Another is to leave the UK, which I see huge numbers of people doing, and the rate is climbing.

and the reality is that most ppl won't leave. and that, however many are leaving, more are coming here, hence the net immigration figures. which suggests that this country is doing a relatively good job at being a place ppl want to live in.

Superscrooge

I can see the reasoning behind HMG pension changes.

They want to encourage everyone to have pension savings and so there is generous tax relief on pension contributions. However the country has a massive deficit and needs to make savings and it makes sense to stop that tax relief at a certain level.

There is logic to giving generous tax relief on a pension pot up to £1Million and then taxing pension pots in excess of that amount. My understanding is that a pension pot of this size can generate an annual pension of around £45,000 which is sufficient to give a good standard of living and prevent someone being a burden on the state. But doesn't mean that taxpayers are funding tax relief on mega-pensions.

Seems a reasonable compromise to me!

Eco_Miser

Pincher wrote: »

We need a Quaker II religious order.

The financial services should be run by people who have no right to possess any property, like priests. Orphans are recruited from birth, and neutered so there is no urge to horde wealth for an heir. They should have security of tenure, but execution by extreme torture for any betrayal of investor interests.
...

That sounds more like the Roman church and the Knights Templar than the Quakers. Their philosophy seemed to be "make as much as you can without cheating anyone" and in the 19th century created the foundations of both our banking and confectionery industries.

Malthusian

We need a Quaker II religious order.

I agree. We will rampage through the universe assimilating all lifeforms into our cybernetic collective. There will be no need for pension plans because aging Strogg will be dismembered and their parts recycled into new cyborgs. In the name of the Makron, the Tank, and the holy Quad Damage... oh, never mind, I thought you said Quake II religious order.

The financial services should be run by people who have no right to possess any property, like priests.

I wouldn't take advice from your priests if they paid me (not that they could). The first rule of financial advice is not to invest in anything that your advisor wouldn't invest in. A penniless priest-advisor is no more attractive to me than an obese personal trainer, a dentist with rotting teeth or a skinny chef.

Pincher

Chickereeeee wrote: »

Good idea, but it would fall foul of the sex discrimination laws.

C

Oh really, like taxis with women drivers for women is not discriminatory. They are refusing a job opportunity to male drivers, specifically based on sex. Might as call it the Womens Guild.

Nothing stopping them forming their own sorority.

The Scots can form their own brand.

The Yorkshire brand is already over used. PlusNet is tenuous, but Yorkshire Tea is just surreal.

Unique selling point: castrated orphans. Now that's creative blue sky thinking.

TheTracker

I think it a myth that pension incentives are "generous". I took quite a while to be convinced under the current arrangements and would seriously question stopping further involvement if any reliefs were reduced. The constant messing around with rules does seriously impact confidence of those contributing.

Having a nation of pension contributing citizens is good for the country, and reduces future reliance on state pension, health services, etc. But I always thought the same thing for education, that it was in the nations best interest to have an educated population. I never previously thought of free education or avoided income tax through pension contribution as "reliefs" or "incentives" to the citizen, I thought of them as investments by the country in its own future. How wrong I was.

Pincher

Malthusian wrote: »

I wouldn't take advice from your priests if they paid me (not that they could). The first rule of financial advice is not to invest in anything that your advisor wouldn't invest in. A penniless priest-advisor is no more attractive to me than an obese personal trainer, a dentist with rotting teeth or a skinny chef.

Damn, it was a three birds with one stone solution.

1. Orphans are adopted, and get a secure job for life.
2. Population control.
3. Overcomes the Agency Problem, where the agent maximises profit for himself, as opposed to the investor.

Malthusian

Arguably, a financial advisor is not an agent (in the sense of the principal-agent problen). The last client agreement I saw spells out very specifically that "the relationship between us shall not be that of agent and principal" or something along those lines. An "agent" is traditionally defined as someone able to make decisions on behalf of the "principal". Traditionally, a financial advisor is not able to make decisions on behalf of the client. He advises the client, and the client then makes his own decision.

But we could easily muddy the waters by talking about discretionary permissions and information asymmetry, so leave that to one side.

The more important issue that an adviser with no interests is even more useless to me than one who may have his own interests that conflict with mine. If the only incentive that exists in his life is to avoid torture by the Order, then the only rational course of action is to a) put all my money in cash b) hang himself. Most people want an adviser whose interests are aligned with theirs, not one with no interests at all.