Is Paying £2,880 Into A Pension Moral For The Better Off

marlot

drumtochty said:

...

Is it reasonable for the that couple to take that tax relief for the lower earner in retirement when in a lot of cases the tax has been paid by breadwinners in a family who are bringing up kids on a salary less that the retirees partner?

Just a thought for the day!

There's the other side to this too.   If you have a couple where one partner earns £80k, and the other nothing, then they pay more tax than a couple who each earn £40k.

DairyQueen

drumtochty said:

There are a number of posters on this forum retired or getting there who either themselves or their partners will have retirement incomes just below £10,000, That person pays £2,880 a year into a Sipp to get the £720 tax relief. If one of the partners has no earned income. They can both do that .

Let's say for this discussion that one partner in retirement will have a combined state and occupational pension income over £30,000 a year.

Is it reasonable for the that couple to take that tax relief for the lower earner in retirement when in a lot of cases the tax has been paid by breadwinners in a family who are bringing up kids on a salary less that the retirees partner?

Just a thought for the day!

God give me strength.

jamesd

drumtochty said:

There are a number of posters on this forum retired or getting there who either themselves or their partners will have retirement incomes just below £10,000, That person pays £2,880 a year into a Sipp to get the £720 tax relief. If one of the partners has no earned income. They can both do that .

Let's say for this discussion that one partner in retirement will have a combined state and occupational pension income over £30,000 a year.

Is it reasonable for the that couple to take that tax relief for the lower earner in retirement when in a lot of cases the tax has been paid by breadwinners in a family who are bringing up kids on a salary less that the retirees partner?

Forum policy first: the forum exists to help people to maximise the benefit of the system and it's inappropriate to criticise them for doing so.

It's reasonable for:

1. the lower income one to take the £720
2. the £30k combined one to take the £180
3. the lower one to transfer £1,250 of income tax personal allowance to the higher, saving £250 of income tax.

They will be paying 0.2 * ( £30,000 - £12,500 - £1,250 ) = £2,250 a year of income tax and receiving £900 of pension gain until age 75.

The family bringing up kids are likely to be net recipients of state aid, not net payers and even if not, your hypothetical couple may have been in the same situation. To get some idea of the subsidy add:
a. cost of pregnancy and birth care for the mother
b. cost of medical care for each child
c. cost of education for each child
d. cost of child benefit and future cost in state pension of NI credits
e. cost of assistance with childcare
f. cost to the rest of society of the greenhouse gas emissions of each child

Compared to a childless couple like our last Prime Minister with the same income for both over the child years.

The family with kids are subjecting us to substantial other costs because having a single child causes such high greenhouse gas emissions that a couple doing all they could  to reduce their own emissions would be unlikely to cover even 20% of them.

There is a morally bad set in your question: that couple with children, plural, who you try to set up as good victims. They are really a good target for environmental taxes designed to reduce future emissions by making having children increasingly undesirable. Repayable loans for second and subsequent CB. Repayable average health care cost for the mother of the second child, and for third and subsequent children, say, trying to target net zero greenhouse cost per child during their lifetime, with both the antisocial parents and their children bearing the cost of their choice.

Andrew31

fred246 said:

We have been paying £3600 into a pension for my housewife wife for years. Do we withdraw it to avoid income tax or leave it there to potentially avoid inheritance tax?

Start your own Thread Fred.   and provide full details of income and assets. 

Andrew31

jamesd said:

drumtochty said:

There are a number of posters on this forum retired or getting there who either themselves or their partners will have retirement incomes just below £10,000, That person pays £2,880 a year into a Sipp to get the £720 tax relief. If one of the partners has no earned income. They can both do that .

Let's say for this discussion that one partner in retirement will have a combined state and occupational pension income over £30,000 a year.

Is it reasonable for the that couple to take that tax relief for the lower earner in retirement when in a lot of cases the tax has been paid by breadwinners in a family who are bringing up kids on a salary less that the retirees partner?

Forum policy first: the forum exists to help people to maximise the benefit of the system and it's inappropriate to criticise them for doing so.

It's reasonable for:

1. the lower income one to take the £720
2. the £30k combined one to take the £180
3. the lower one to transfer £1,250 of income tax personal allowance to the higher, saving £250 of income tax.

They will be paying 0.2 * ( £30,000 - £12,500 - £1,250 ) = £2,250 a year of income tax and receiving £900 of pension gain until age 75.

The family bringing up kids are likely to be net recipients of state aid, not net payers and even if not, your hypothetical couple may have been in the same situation. To get some idea of the subsidy add:
a. cost of pregnancy and birth care for the mother
b. cost of medical care for each child
c. cost of education for each child
d. cost of child benefit and future cost in state pension of NI credits
e. cost of assistance with childcare
f. cost to the rest of society of the greenhouse gas emissions of each child

Compared to a childless couple like our last Prime Minister with the same income for both over the child years.

The family with kids are subjecting us to substantial other costs because having a single child causes such high greenhouse gas emissions that a couple doing all they could  to reduce their own emissions would be unlikely to cover even 20% of them.

There is a morally bad set in your question: that couple with children, plural, who you try to set up as good victims. They are really a good target for environmental taxes designed to reduce future emissions by making having children increasingly undesirable. Repayable loans for second and subsequent CB. Repayable average health care cost for the mother of the second child, and for third and subsequent children, say, trying to target net zero greenhouse cost per child during their lifetime, with both the antisocial parents and their children bearing the cost of their choice.

Savage, but completely fair.  Well done!!

your forgot to mention getting to park closer to the shops, which I dont understand!

Albermarle

They are really a good target for environmental taxes designed to reduce future emissions by making having children increasingly undesirable. Repayable loans for second and subsequent CB. Repayable average health care cost for the mother of the second child, and for third and subsequent children, say, trying to target net zero greenhouse cost per child during their lifetime, with both the antisocial parents and their children bearing the cost of their choice.

Somehow I don't think this will make it into any party's manifesto for the next election 

xylophone

Surely it is the responsibility of the citizen to support parenthood?
Those children will be paying for the SP of the previous generations and providing the labour to care for them?

jamesd

xylophone said:

Surely it is the responsibility of the citizen to support parenthood?
Those children will be paying for the SP of the previous generations and providing the labour to care for them?

Ideally of the person(s) making an informed free choice to bring the child into the world.* But with society (the minority of net lifetime payers) ensuring that as a minor the child receives proper care and education.Those receiving the SP will in their time, if net payers, have covered the previously mentioned costs of the child.

* which excludes a wide range of sex crimes like traditional rape, condom cutting and lying about birth control where at least one party didn't consent and should be protected from the consequences of being a crime victim as far as possible.

Albermarle said:

Somehow I don't think this will make it into any party's manifesto for the next election 

Not major parties at least but there seems to be increasing recognition that globally children are a problem. Looking globally may be a cost of having children solution in the UK because it's known that these things reduce birth rates:

1. improving child health care and hence survival rates
2. improving education of mother and children
3. increasing access to family planning services
4. improving elderly care systems (lots of children as a "pension")

So doing the offsetting via foreign aid may be bot more cost-effective and a way to partly address arguments that developing countries should be allowed to pollute more.