Rishi after Pensions Tax Relief

m_c_s

At least the personal tax allowance will increase next year by CPI (Sept).

Andy_L

zagfles said:

ussdave said:

michaels said:

Looks like we spoke to soon, some sort of change to indexation rules affecting index linked bonds and DB pensions (the BBC are either to dumb to explain it or assume their readership are too dumb to understand it)

https://www.bbc.co.uk/news/business-55070292

Aren't a lot of DB schemes these days linked to CPI instead of RPI, so impact is limited?
I may have misunderstood - have read it in a rush.

I think they are in the public sector but not the private. An actual minor pension advantage in the private sector!

Many Private Sector DB schemes automatically switched over to CPI at the same time as their scheme rules specifically referred to the legislation used for uprating the Civil Service scheme.

badmemory

By £62.50, if you are a 20% tax payer that is just over £1 a month.

Linton

zagfles said:

ussdave said:

michaels said:

Looks like we spoke to soon, some sort of change to indexation rules affecting index linked bonds and DB pensions (the BBC are either to dumb to explain it or assume their readership are too dumb to understand it)

https://www.bbc.co.uk/news/business-55070292

Aren't a lot of DB schemes these days linked to CPI instead of RPI, so impact is limited?
I may have misunderstood - have read it in a rush.

I think they are in the public sector but not the private. An actual minor pension advantage in the private sector!

Some private sector pensions explicitly referred to RPI in their scheme rules, so changing could be difficult.  Others were less specific.

hugheskevi

zagfles said:

ussdave said:

Aren't a lot of DB schemes these days linked to CPI instead of RPI, so impact is limited?

I think they are in the public sector but not the private. An actual minor pension advantage in the private sector!

Many private sector pension have their indexation linked to RPI, but usually with a cap (2.5% or 5%, depending on when accrued).

Mostly that hasn't mattered during the last few decades of benign inflation, but if that changes, uncapped CPI offered by public service pension schemes might prove far more valuable.

zagfles

hugheskevi said:

zagfles said:

ussdave said:

Aren't a lot of DB schemes these days linked to CPI instead of RPI, so impact is limited?

I think they are in the public sector but not the private. An actual minor pension advantage in the private sector!

Many private sector pension have their indexation linked to RPI, but usually with a cap (2.5% or 5%, depending on when accrued).

Mostly that hasn't mattered during the last few decades of benign inflation, but if that changes, uncapped CPI offered by public service pension schemes might prove far more valuable.

Good point, something we've been discussing in another thread, people think they have a safe DB scheme but the inflation of the 70's would have more than halved its real value even with a 5% cap.

Post 97 service has to have a 5% min cap, pre 97 there doesn't have to be any inflation increase in payment (except on the GMP). Different rules for revaluation in deferment.

zagfles

Linton said:

zagfles said:

ussdave said:

michaels said:

Looks like we spoke to soon, some sort of change to indexation rules affecting index linked bonds and DB pensions (the BBC are either to dumb to explain it or assume their readership are too dumb to understand it)

https://www.bbc.co.uk/news/business-55070292

Aren't a lot of DB schemes these days linked to CPI instead of RPI, so impact is limited?
I may have misunderstood - have read it in a rush.

I think they are in the public sector but not the private. An actual minor pension advantage in the private sector!

Some private sector pensions explicitly referred to RPI in their scheme rules, so changing could be difficult.  Others were less specific.

The "less specific" ones have already changed, the ones that reference RPI will by the looks of it from 2030 reference the newly formulated RPI which AIUI is basically CPIH.

Sailtheworld

The reports of the demise of tax relief on pension contributions were, as usual, somewhat exaggerated.

NedS

Sailtheworld said:

The reports of the demise of tax relief on pension contributions were, as usual, somewhat exaggerated.

I think that would come during the budget, if it were to happen. And as others have said, it is very unlikely the Chancellor would announce large changes to pensions in March to be implemented in April (not feasible to implement in short period of time), so any large changes would likely not be until 2022/23 at the earliest.

Thrugelmir

ussdave said:

michaels said:

Looks like we spoke to soon, some sort of change to indexation rules affecting index linked bonds and DB pensions (the BBC are either to dumb to explain it or assume their readership are too dumb to understand it)

https://www.bbc.co.uk/news/business-55070292

Aren't a lot of DB schemes these days linked to CPI instead of RPI, so impact is limited?
I may have misunderstood - have read it in a rush.

Both the DB pension funds and annuity providers invest heavily in these Gilts. 
Which ever way you look at it there's a cost to the private sector.