Budget 2017

jerrysimon

OneInTheHat wrote: »

I am wondering whether at some point they will look at means testing the state pension. All these press stories about how 'wealthy' pensioners are makes me think at some point this will be on their radar (not this government I don't think).

Yes I have this in the back of my mind and the fact it will probably come in between now as I start to draw my DB pension and when I get to SP age in 10 years time lol

I wonder if means testing would be joint income of husband and wife/partners given my wifes personal pension is tiny compared to mine.

Jerry

brewerdave

NI payments for pensioners plus pensioners tax rates starting at much lower levels than the "workers" -all pensioner "benefits" to be taxed as benefits in kind ??
That'll put most pensioners back in the s**t with net incomes WAY below the young "families" -I'll get my coat ...............

madeinireland_2

kidmugsy wrote: »

I know two GPs who've bailed out early because of LTA. One has gone back to practise part time, the other has retired completely. The lowering of LTA was one of the poorest decisions of the Great Pension Liberator. Perhaps Hammond could simultaneously raise the DB multiplier to 35 and raise the LTA to a couple of million. Or somewhat less, to avoid the emotional impact on the envious of 'Two Million!'; it was £1.8M when Labour lost office, so that would do.

Another vote here for scrapping LTA. I'm not a doctor but will hit the LTA limit and so am likely to retire in next couple of months and this is the main reason - although I may have still gone anyway. I'm not on for a £50k DB pension by the way it's because I made substantial AVC contributions and also have a separate SIPP.

westv

jerrysimon wrote: »

Yes I have this in the back of my mind and the fact it will probably come in between now as I start to draw my DB pension and when I get to SP age in 10 years time lol

I wonder if means testing would be joint income of husband and wife/partners given my wifes personal pension is tiny compared to mine.

Jerry

But how would means testing be done if pensioners have a DC pot that they might draw odd amounts from?

kidmugsy

Means testing State Retirement Pensions would be a pretty surefire way to lose an election even if your opponent were Jezza Corbyn. Undoing the triple lock might be achievable especially if they applied a link to the earnings index to both Basic Pension and Additional Pension.

jamesd

A popular means test would be easy enough, based on say asset values over ten million Pounds including all pension net present value and property values. By contrast, undoing the triple lock would hurt a lot of poorer pensioners.

nicholbb

I (carrying on the thread paranoia) think means testing pensions will be introduced for those 40 or younger going forward.
Retirement age increased as Trumpopolics and NHS grotting hasn't thinned the grey herd.
DB have been seen to be viable, so tax relief reduced and windfall tax.
LTA will be increased in line with CPI measure of inflation, to stop constant calculations this will be perminantly set at the April 2015 figure (-0.1).

PensionTech

Yes, for parity with DC pensions normally used in the private sector the CETV, without under-funding adjustment, should be used to value DB schemes for the Lifetime Allowance.

I agree with all except "without under-funding adjustment". If there is an underfunding adjustment applied, it is because the scheme is underfunded on a CETV basis (more lenient than a technical provisions basis) and therefore there is a risk that the scheme will not be able to meet its liabilities. It shows the scheme is not willing to discharge its liabilities at the full CETV rate. If the member were to transfer to DC, the underfunding adjustment would be applied. I therefore don't think parity between DB and DC is achieved during this method - for true parity you should face the same charge whether you choose to realise your benefits in DB or DC form.

Of course, it wouldn't happen anyway - and there are some good reasons for that, to be fair. What about all the people who couldn't apply for Individual Protection because 20x their DB pension didn't take them above the SLTA, but are now facing a CETV-based charge? What about the huge variance in CETVs according to market conditions (more drastic than fluctuations in DC asset values)? What about the massive grey area in setting the basis for CETVs that could allow schemes to game the system anyway and cause massive variation between different schemes for the same benefits?

Aretnap

westv wrote: »

But how would means testing be done if pensioners have a DC pot that they might draw odd amounts from?

Same way as they already apply undrawn pension pots to other means testing benefits I imagine - calculate how much income they'd have if they used the pot to buy an annuity today, and then assume that they have that income for the purposes of the means test.

(I don't think that means testing the state pension is on the horizon in the immediate future myself - it would be politically toxic and would destroy the incentive to save - but if it were to be done then factoring in DC pension pots isn't a major barrier)

edinburgher

Flat rate relief would be lovely - an incentive for those of us who aren't completely !!!!less (but are unlikely to make £40k+ any time soon) to reduce our likely impact on the state/future people