Budget Autumn 2017 Pension Tax Relief

marlot

lisyloo wrote: »

Lowering the LTA doens't disincentivise saving...

It did for me! I started saving extra into my pension when the limit was £1.8m, confident that I'd be well within it.

Since it was reduced, I've cancelled my AVCs

marlot

Thrugelmir wrote: »

Doubt it's a major consideration. Given the level of pension etc they receive. Let alone the money they've amassed during their working lives.

Its a large part of the reason I'm stopping next year. There doesn't seem much point working beyond 55 if I'm already over the LTA.

msallen

lisyloo wrote: »

Perhaps we don't care about IT consultants ...

:(:(:(:(:(
Nobody loves me :rotfl:

However I got started on building up a decent pension late in life after going down the mature student route in my thirties so there's no danger of me hitting the LTA (unless its significantly lowered).

Triumph13

AlanP wrote: »

I think many on here are missing what could be the opposing view point.

Increasing the pension tax relief offered to BR taxpayers swings pension savings in their favour as they could get (say) 30% relief on the way in and then pay 25% on the 75% that isn't tax free.

Using the, not unreasonable in my view, premise that most HR taxpayers will manage to save towards their retirement and won't be reduced to paupers by limiting the HR relief then incentivising those on lower salaries to save more for latter years could be a social good and help to reduce benefit / social care charges falling on the public purse a few decades down the line.

I hope that's a typo and not inside knowledge of what's coming in the budget!

lisyloo

marlot wrote: »

It did for me! I started saving extra into my pension when the limit was £1.8m, confident that I'd be well within it.

Since it was reduced, I've cancelled my AVCs

ok, fair point, but that's sort of part of the same point.
Most people are going to stop contributing.
For most people that means stopping working.

But I do also accept the point that they will do what's best for the short term regardless of the long term consequences.

Anonymous101

Paul_Herring wrote: »

Some already are - I'm planning on retiring around 53. Worst case scenarios are I save a bit more each month, defer for a year or spend a little less; neither are particularly onerous to me.

As am I. If the min. age were to increase significantly I'd have to reassess where the majority of my savings were held.
Its some way off for me but the sooner I can get there the better and I'm constantly reassessing the most efficient way to get there.

Malthusian

Thrugelmir wrote: »

Doubt it's a major consideration. Given the level of pension etc they receive. Let alone the money they've amassed during their working lives.

That's entirely the problem. You have a profession that is of great value to society and is rewarded as such. Somewhere around 50-60 most of them will have enough money (whether in pension form or otherwise) that they don't have to work another day if they don't want to. We want them to work forever or as close as they can get, because we believe that healthcare should be available for free to everybody. (This political axiom creates infinite demand, and therefore demands infinite supply.)

So we already have the thorny problem of how to incentivise doctors to carry on working when they're already set up for life, and then we make it even worse by applying a penal rate of taxation on their remuneration, once they've accumulated a certain level of pension savings - a disincentive which will hit them just at the point they're likely to be thinking about winding down.

It's like shooting yourself in the foot - on the starting line of a marathon. It's not just stupid but very poorly timed.

The Lifetime Allowance should simply be abolished. It's unlikely it raises a significant amount of tax for the Treasury because most people stop saving into pensions before it becomes a problem. It mainly affects those who are active members of defined benefit schemes, where it's attractive to pay in even if your benefits will be hit by a Lifetime Allowance charge - and the Treasury already gets higher rate income tax from those.

bigadaj

Maybe we need indentured dentists?

stoozie1

As the OH of a 42 yr old NHS dentist, whose scheme will likely now have a normal retirement age of 69/70, I would argue the opposite of a few upthread. I think it is irresponsible to expect surgeons to be as accurate at tiny surgery at 70, and feel incentives to early retirement have many wider societal positives.

resk

How would a reduction or removal of pension tax relief work? Currently my employee pension contributions are deducted from my gross pay before any tax is taken off. In other words, the income tax and NI is calculated on the adjusted (reduced) salary, so my tax relief is automatic. Would this entire system be stopped?