Pension payments before the autumn budget 2018

stphnstevey

I realize this is the savings board, but this board tends to get more views and attention than the pensions board

I have been reading there might be changes to pensions in the budget and if planning t make pension contributions this year, it maybe worth doing prior to the budget (ie the next 2wks)

What do people think about this?

ColdIron

I wouldn't imagine any new legislation would be in place before the new tax year

Thrugelmir

Be surprised if any changes resulted in a cliff edge. Whole point of autumn budget rather than March. Is to allow time for major changes to be implemented in good time. A mid year change could cause all sorts of complications.

Contribution levels are already well capped. Chancellor could simply allow inflation to do the dirty work. By freezing current contribution levels. Thereby reducing the value of the benefit over time seamlessly.

Malthusian

In general ColdIron is right, but it has been beneficial to make pension contributions pre-Budget in the past. E.g. July 2015 when you potentially got an extra £40,000 annual allowance if you had paid in £40,000 before the budget.

However, for something like withdrawal of higher rate tax relief, it will almost certainly take effect from the next tax year, so you will still be able to fill your boots in 2018/19.

If it is a good idea to make pension contributions even if there was no Budget at all, then do it now. But if you are going to regret it if your Budget predictions turn out to be wrong, then wait.

stphnstevey

So maybe just pension advisers/companies trying to incentivise contributions now?

What was the change that ended up allowing effectively double contributions in one tax year? Was that an example of implementation in the middle of a tax year?

ColdIron

It was a one-off event to align the Pension Input Period with the tax year. Unfortunately I missed it but things like this don't come along very often

dunstonh

I realize this is the savings board, but this board tends to get more views and attention than the pensions board

Not really. Its mostly the same regulars. Just less traffic as it covers only pensions. Whereas this covers savings and investments.

So maybe just pension advisers/companies trying to incentivise contributions now?

You do see the usual marketing attempts around budget time from the big guns.

It is rare for financial services to suffer an immediate deadline of midnight from a budget. It only tends to happen on loophole corrections or things that may be beneficial. An allowance reduction would normally be tied in with tax year end as the costs of having split tax year allowances would be expensive for the state. Plus, pension companies would have no time to implement it on their software if it was immediate.

Malthusian

stphnstevey wrote: »

So maybe just pension advisers/companies trying to incentivise contributions now?

Probably. Pre-Budget is always a good time to drum up business.

What was the change that ended up allowing effectively double contributions in one tax year? Was that an example of implementation in the middle of a tax year?

Pre 2015 there was a horrendously complicated system of "pension input periods" which meant, very briefly, that you could make a pension contribution in one tax year and it could be counted against your Annual Allowance for the following tax year. The July 2015 Budget ended this nonsense by forcibly re-aligning all pension input periods with the tax year from then on.

To avoid retrospectively punishing people who had made pension contributions between April and July 2015 expecting it to count against their allowance in 2016/17, it was necessary to introduce a kind of double allowance. The annual allowance for 2015/16 was £80,000, but only £40,000 of this could be used by contributions between the July Budget and April 2016.

The thing to remember is that this was about avoiding retrospective punishment. This principle is why the Government almost certainly won't make significant changes in the current tax year, but it could do for the next one.

kidmugsy

dunstonh wrote: »

Not really. Its mostly the same regulars.

Talking of which, I was pleased to see a McKneff comment recently. But what has happened to jamesd? He used to be full of vim.

jamesd

kidmugsy wrote: »

But what has happened to jamesd? He used to be full of vim.

He grew tired of the frequency of personal attacks on people and went off to have some alternative fun instead, lots of fun being a tourist. This week was a London show of some sort every evening. If you see something critical of a poster instead of their points, please report it to the forum team. If you're tempted, use the report button on what tempted you instead. If we all do it, with luck we'll get things taken care of before the intended target even sees the post.

Mr_Costcutter

jamesd wrote: »

He grew tired of the frequency of personal attacks on people and went off to have some alternative fun instead, lots of fun being a tourist.

I don't blame you