Pensions: George Osborne to drop tax relief plans

AnotherJoe

FWIW I've just had an email from HL outlining the proposed lack of changes at this budget and thus no immediate urgency, but still pointing out that this is a valuable perk that people should be taking advantage of whilst it's there. Which of course is in their interest but also most recipients, since indeed most people don't take enough advantage of the tax breaks a pension brings..

_CC_

Bootsox wrote: »

I never really understood the 33% tax relief proposal, does it not mean giving money to people who hadn't earned it?

Whereas the existing arrangements mean giving higher rate tax relief to people who have earned it.

Yes, hence why "tax relief" would of been scrapped and replaced with a flat rate "savers credit".

I was in two minds about it.

On the face of it, I think a flat rate of around 30% would be a fair, progressive policy.

On the other hand, diverting away from the system of tax relief on contributions leaves the door more open for the flat rate credit to be tinkered about with. The current system is simple; tax free contributions, taxed on way out. This is the best method IMO.

Nothing stopping GO introducing this in a couple years mind you, once the EU vote is behind them.

bowlhead99

AnotherJoe wrote: »

But you didn't highlight "That said, some investors could be better off delaying until after the announcement. For example, basic-rate and non-taxpayers could receive greater tax benefits, depending on what's announced."

And they did say " If you want to make the most of the current rules and are considering a pension contribution"

So I wouldn't say that was scaremongering, I'd say it was prudence and keeping their customers informed. Imagine if they issued no guidance at all and then the mooted instant changes had come in? I think they would rightfully have been criticised when these changes had been so widely telegraphed (or even Daily Telegraphed...)

Yes, it was caveated like it had to be to preserve some credibility -especially as some people would have been better not doing anything if they were low rate taxpayers and a flat rate of over 20% came in.

My comment was really just in reply to Dunstonh who mentioned he hadn't seen much pumping of pension scheme changes on the advised side and wondered whether you got it more on DIY retail.

The answer is most certainly yes, because apart from the TV spots and the media articles, they are sending emails which - like most of their junk mail talking about new fund launches or the latest entry to their Wealth 150+(tm) - purports to be "information sharing" because they have a "great customer service ethic" but it is clearly written by the marketing sales pitch team with language that they hope *appears* unbiased but uses subtle techniques to create fake urgency.

When the history is not really that such changes - from either party but particularly from a right of centre lower tax party -do not successfully 'come in on the night of the announcement' but usually with effect from new tax years, it is a little disingenuous and sneaky to say that of course "there is a *possibility* that any change *might not* happen straight away".

That phrasing implies something is going to take effect and there is a (perhaps quite small) *possibility* that it might not but probably best to assume it will. Whereas the reality is the opposite - large scale changes to pensions, when only three weeks away from a nice clean new tax year, don't typically come in overnight at all. There is just the *possibility* that they *might*.

A 10/100 chance rather than a 90/100 chance, but they can imply it's going to be 90/100 with impunity and fall back on "ah well, nobody really knows but better safe than sorry..." after.