Budget: Hammond mulling tax cuts for young paid for by slashing pension tax reliefs

Silvertabby

My partner's dad would have benefitted from the so called dementia tax. As it stands he has to pay in full for his care if he goes into a home. He has less than £100k in savings and assets. Presently he faces loosing them all except for the last £23,000 due to his needs. Every old person could need care, even if they don't have dementia. He has to pay for home care as he has more than £23k in the bank. Though he can and does claim attends allowance which is not means tested. He owns half of a property with a housing association (recently house on street went for £85K.). Had the Tories kept their policy, he and others in a similar situation would know that they would not lose virtually everything. Posted by datlex

Sadly, it wasn't to be because the Tories didn't get the majority they needed to put this through. The youngsters (most of whom don't even pay tax) were blinded by Labour's pie in the sky promises.

k6chris

Thrugelmir wrote: »

What's required is simplification so that people feel treated equally.

Totally agree, not sure how the numbers would stack up, but a flat tax relief rate of say 25% for everyone might help basic rate tax payers on the way in and be seen to be fairer irrespective of age??

zagfles

Thrugelmir wrote: »

Not if it's 40% in and 20% out. Then there's the issue of loss of ERS NIC on salary sacrifice schemes. Also the intentional reduction in income to beneath £50k in order that there's no requirement to repay any child benefit. The system benefits those that can most afford it.

What's required is simplification so that people feel treated equally.

So how would this "simplification" work for people in final salary pension schemes? Or even CARE schemes?

kidmugsy

Parking_Trouble wrote: »

Corbyns populist policies sound good to me, free education, affordable social housing, re-nationalisation, more manufacturing, etc.

Bonkers. Back to 60s Bulgaria, comrades.

kidmugsy

economic wrote: »

my dad is about to cash in his pension for an annuity at 10%. worth doing now or wait till the budget?

Does he have that much flexibility? Some GAR annuities can be taken only in a narrow window of opportunity.

kidmugsy

datlex wrote: »

Had the Tories kept their policy, he and others in a similar situation would know that they would not lose virtually everything.

If you don't want him to pay for his care, who do you want to pay for it?

Toddy2

I'm in that category, just getting affairs into order. How on earth is anyone expected to be able to retire comfortably.

economic

kidmugsy wrote: »

Does he have that much flexibility? Some GAR annuities can be taken only in a narrow window of opportunity.

yeh he can do it whenever really. the rate increases the later he starts it. probably good time to do it now given asset prices are high and i think 10% really is a no brainer! also he has now retired at 62 so doesnt have much income (apart from another annuity).

michaels

Thrugelmir wrote: »

Not if it's 40% in and 20% out. Then there's the issue of loss of ERS NIC on salary sacrifice schemes. Also the intentional reduction in income to beneath £50k in order that there's no requirement to repay any child benefit. The system benefits those that can most afford it.

What's required is simplification so that people feel treated equally.

Some employers/jobs you get more pay and less pension and vice-versa, for example civil servants where pension is a much higher proportion of pay. How do you define salary sacrifice in a manner that is different from a renumeration package that is skewed towards pension rather than salary?

eg: pay 50k plus pension 20k cf pay 60k plus pension 10k with 10k sal sac. They are the same but you are suggesting the former is acceptable and the latter is not?

Rich2808

Toddy2 wrote: »

I'm in that category, just getting affairs into order. How on earth is anyone expected to be able to retire comfortably.

Problem with the pension system is that the government keeps tinkering with it so you cannot plan ahead - endless annual cuts to life time and annual allowances and now threats to reduce pension tax reliefs.

Of course boomers and pensioners have had the benefit already of the generous tax relief for higher rate taxpayers - whereas today's young people have not. So any cut to tax relief will actually in the long term hit the young more not help them - as they will get old too but won't get the tax relief when they really start paying in in their 40s and 50s!.