"Final salary pensioners may have income limits halved"

hyubh

nigelbb wrote: »

Especially in the case of NHS & other public sector pensions where the pension is effectively just deferred salary.

Just like any any other salary-related DB arrangement though...

nigelbb

GunJack wrote: »

Taking it to 40x would be so punitive it should be a political non-starter. IF they're thinking of altering it, I could see a case for 25x maybe, but no higher.

Retrospectively hammering people fortunate to have DB pensions (most of which will have had them since before LTAs were introduced) is just plain wrong IMHO.

nigelbb wrote: »

Especially in the case of NHS & other public sector pensions where the pension is effectively just deferred salary.

hyubh wrote: »

Just like any any other salary-related DB arrangement though...

Especially so in the case of the public sector where traditionally low pay was balanced by a generous pension often with the opportunity for early retirement so overall compensation over a working lifetime was generous.

nigelbb

Paul_Herring wrote: »

All pensions are considered to be deferred salary, no?

No. A DB pension is but a DC pension is just a tax efficient savings plan.

GunJack

This shouldn't be made to be JUST about public sector pensions, it'll affect anyone with a current or deferred DB pension, which I suspect is rather a lot of people....and if memory serves me correctly, many private sector schemes were at least as, if not more generous, than the public sector ones.

Albermarle

Many of those with DC pensions are self employed/private traders

Not sure if this is the case. Most private sector employer DB schemes are closed, and employees moved on to DC schemes . So more long standing employees above a certain grade will have an old DB and an active DC scheme .
Some private employers only ever had a DC scheme, especially the medium sized companies.
Plus now nearly all employees have to be auto enrolled in a DC scheme , if there was not one already operating.

Paul_Herring

nigelbb wrote: »

All pensions are considered to be deferred salary, no?

No. A DB pension is but a DC pension is just a tax efficient savings plan.

So my forgoing my salary now using DC, to be taken after I retire, isn't deferring my salary.

Ok, glad to have that sorted then.

lisyloo

Paul_Herring wrote: »

So my forgoing my salary now using DC, to be taken after I retire, isn't deferring my salary.

Ok, glad to have that sorted then.

I’m sure you’re already aware of this but some deferred salary schemes will just stop when you die, whereas a savings pot would still be there with whatever you haven’t spent.

I’m not one to get too het up over words but there are differences which from your other posts I’m pretty sure you are aware of.

nigelbb

Paul_Herring wrote: »

So my forgoing my salary now using DC, to be taken after I retire, isn't deferring my salary.

Not really it isn't. That's just putting some of your current salary into a savings scheme & getting tax relief on the payments.

Deferred salary from a defined benefit scheme means that you are paid part of your salary today & the remainder after pension age for the rest of your life e.g. the NHS pension pays 1/54 of salary from SPA until death. Assuming you lived 27 years post SPA you will receive 2/3 as salary today & 1/3 as pension after you retire.

nash0819

I'm glad I've stumbled across this thread. I've been paying into the LGPS DB scheme continuously since May 1995. No other pensions - SIPPs or AVCs.

My last annual statement (March 2018) suggested I would hit 85% of my LTA if I continue contributing until age 67. That's unlikely, as I hope to have enough bridging finance to be able to retire at 60 (in 2027), whilst aiming to take LGPS pension at 65ish to avoid excessive penalisation by artcurial reductions.

So, as the 20x multiplier stands, I'll be fine with the LTA. But if it increases to say 30x I'm starting to worry I will breach it?? [Not done the proper sums yet, that's my next task.]

I am currently considering adding a good few 10K into SIPPs (rather than SSISAs). But now I wonder if SIPPs are worth the gamble of breaching the LTA (presumably all pension pots are added together for LTA calcs).

I would like to "wait and see" before deciding. However, judging by the general view on here, nothing will be sorted before the end of the current tax year.

Albermarle

I would like to "wait and see" before deciding. However, judging by the general view on here, nothing will be sorted before the end of the current tax year.

I would be very surprised if anything happened so quickly, the government is somewhat distracted with other matters at the moment . In any case there would most likely be a transition period after it was implemented .

I am currently considering adding a good few 10K into SIPPs (rather than SSISAs). But now I wonder if SIPPs are worth the gamble of breaching the LTA (presumably all pension pots are added together for LTA calcs).

Yes all pots count towards LTA , but it only kicks in when you take the benefits .
Normally on this forum , the advice is not to let potential tax issues in future define your investment plans today . As tax policy can change in unexpected directions and with pensions you have benefitted greatly from a beneficial tax regime , so if you have to pay a bit extra back then so be it.