How do people spread the risk?

EdSwippet

michaels wrote: »

Might be rioting on the streets if dc pensions are confiscated and db untouched.

You're assuming the government will take the simple and direct approach here.

Of course, it won't. It prefers to accomplish its goals in underhand ways -- for example, with the way it chooses to apply the lifetime allowance -- and so look after itself and its own first and foremost while maintaining a facade of impartiality.

Apodemus

michaels wrote: »

Might be rioting on the streets if dc pensions are confiscated and db untouched.

Precisely! But I don't think the same would apply if there was a change to SIPP or ISA rules or a change to tax treatment of dividend income. So there is a political element to choice of pension investment vehicle.

In my position, as a basic rate tax-payer, the tax-on-the-way-in versus tax-on-the-way-out argument should mean that I should focus more on the return in the vehicle rather than the type of vehicle. However, I feel that I should balance the risk of lower returns in the dc pot with the lower risk of an adverse change to its tax treatment.

How I factor in state pension possibly carries even greater political risk. The £14k or so (for a couple) makes a big difference to my planning and if it was to become means-tested (which might be politically acceptable) I might make different decisions on current allocations.

Even additional payments into a DB scheme carry a political risk if a future government decided to apply NI to DB pensions, or merge NI into mainstream income tax.