Osbourne's tax relief changes in the March budget

robin61

RickyB2000 wrote: »

I think the only people who really care are those heading into retirement and those with enough cash that tax effeciancy becomes a real concern. The rest just pay what their employer suggests and assumes it will be enough.

I think this is absolutely right. A lot of my colleagues have done just this and even well into their fifties really have not given their pensions much thought. Most of these guys are higher rate taxpayers as well and could have been doing very nicely out of the AVC scheme which is linked to the DB pension scheme.
It remains to be seen how long this will last now so they may well have missed the boat. I am just pleased I have managed to do OK out of it.

RickyB2000

robin61 wrote: »

I think this is absolutely right. A lot of my colleagues have done just this and even well into their fifties really have not given their pensions much thought. Most of these guys are higher rate taxpayers as well and could have been doing very nicely out of the AVC scheme which is linked to the DB pension scheme.
It remains to be seen how long this will last now so they may well have missed the boat. I am just pleased I have managed to do OK out of it.

They probably won't miss out that badly as they probably have very generous DB pensions. You will just be quite a bit more comfortable (which is great ).

However, in the world of DC schemes, ignore it at your peril!

saver861

RickyB2000 wrote: »

Will it though? Perhaps to a 50 something heading into retirement. How many 20 / 30 year olds would see 10% extra in 40 years time worthwhile when they are paying extortionate levels of rent / morgatage today.

On the other hand, many in their 20's/ 30's are much more aware of the need for pensions and planning for retirement than current 50 year olds were when they were 20.

Rent and mortgage existed 30 years ago also. Are those in their 20's less well off than current 50 year olds were then? It is subjective and can't ever be definitive but I do think the current 20 somethings will have a much more informative view of the 'future' than was the case back then. Thus the greater majority of younger people will be better prepared.

robin61

RickyB2000 wrote: »

They probably won't miss out that badly as they probably have very generous DB pensions. You will just be quite a bit more comfortable (which is great ).

However, in the world of DC schemes, ignore it at your peril!

Yes they will still do OK. The younger generation will need to be more clued up though as the DB scheme was stopped for new entrants quite a number of years ago. However I really do believe that it is rare for younger people to be very interested in planning for their retirement. I think most of them have the same attitude as the older guys so unfortunately the majority are going to have to work for longer and live on less.

michaels

So will employer pension contributions / salary sacrifice be stopped and any monies treated as part of income? Does this mean there are also NI consequences? Could a change like that be brought in on the day? Surely it is complicated to enact?

For a higher rate taxpayer making standard pension contributions (not salary sacrifice) you will now pay 10% tax on the way in and most likely at least basic rate (20% - unknown) on the way out rather than 40% if you take it as income and have the flexibility to isa/spend it as you see fit - is it really worth pensioning any more?

gadgetmind

bigadaj wrote: »

Good luck to you with your four day week but no one is indispensable and that work will be taken up elsewhere by others.

Yes, but not in the UK.

the fact there was no shovelling of £225,000 allowed annually any more.

Saving is saving. Sticking your shovel into someone else's stores is a different thing.

the government might consider this a saving to the treasury.

I'm sure they might, but I'm going to be paying £20kpa less in tax as a result of my 4 day week, which is a direct result of their meddling with tax and pensions. What they may see as a saving will almost inevitably cost the treasury both directly (less tax per tax payer) and indirectly (loads of tax payers clear off elsewhere.)

I am personally seeing both of these on a daily basis.

michaels

gadgetmind wrote: »

I'm sure they might, but I'm going to be paying £20kpa less in tax as a result of my 4 day week, which is a direct result of their meddling with tax and pensions. What they may see as a saving will almost inevitably cost the treasury both directly (less tax per tax payer) and indirectly (loads of tax payers clear off elsewhere.)

I am personally seeing both of these on a daily basis.

Quite agree - I would have paid a lot more tax for the last couple of years if they hadn't tried to take away 2.4k net of child benefit resulting in my managing my income/pension trade off differently to avoid this loss and at the same time 'saving' 8k pa of income tax.

colsten

RickyB2000 wrote: »

I think the only people who really care are those heading into retirement

Isn't every single on of us heading into retirement? If you mean those whose retirement is just round the corner: it would be a tad late to think about your pension only then.

RickyB2000

colsten wrote: »

Isn't every single on of us heading into retirement? If you mean those whose retirement is just round the corner: it would be a tad late to think about your pension only then.

Yes, those for whom it is around the corner. And yes, very much to late. But as Robin said, many who are paying employer minimum into a scheme are probably expecting things to work out for the,. The rest probably have immediate cost of living issues to worry about pensions.

EdSwippet

Latest speculation from the DM linked below. The skies above 11 Downing St must surely now be a tangled mass of string and kite paper that entirely blot out all natural light.

dailymail.co.uk: Treasury looking at limiting lifetime allowance to £750,000 and restricting amount that can be put away each year