Telegraph reporting - pensions tax threat

OldMusicGuy

jimi_man said:

Hi

It doesn't make any difference how it's made up. For those reaching SPA post 2016, then the nSP will apply and therefore the triple lock applies to the whole amount.

This was queried in the Lords late last year as being potentially unfair against older pensioners who reached SPA pre 2016, against those younger pensioners who reached SPA post 2016, but the answer was basically that it's 'swings and roundabouts'.

I hope what you say is true but I suspect it isn't. My SP in 2023 will be higher than the nSP because of my NI contributions as at 2016. It would be nice if all my pension was subject to the triple lock but I suspect the amount I get over the nSP amount will be subject to CPI. But I can't find anything that explicitly states this this, so maybe I will be in luck. 

zagfles

OldMusicGuy said:

jimi_man said:

Hi

It doesn't make any difference how it's made up. For those reaching SPA post 2016, then the nSP will apply and therefore the triple lock applies to the whole amount.

This was queried in the Lords late last year as being potentially unfair against older pensioners who reached SPA pre 2016, against those younger pensioners who reached SPA post 2016, but the answer was basically that it's 'swings and roundabouts'.

I hope what you say is true but I suspect it isn't. My SP in 2023 will be higher than the nSP because of my NI contributions as at 2016. It would be nice if all my pension was subject to the triple lock but I suspect the amount I get over the nSP amount will be subject to CPI. But I can't find anything that explicitly states this this, so maybe I will be in luck. 

I think you're talking at cross purposes.

For people reaching SPA after 2016, if you were over the nSP "max" in 2016 then the excess called the "protected payment" will rise with CPI, not the triple lock.

The previous discussion was about someone who was below the nSP max in 2016. Extra earned since then up to the nSP max will rise with the triple lock.

https://www.gov.uk/new-state-pension/how-its-calculated

molerat

OldMusicGuy said:

jimi_man said:

Hi

It doesn't make any difference how it's made up. For those reaching SPA post 2016, then the nSP will apply and therefore the triple lock applies to the whole amount.

This was queried in the Lords late last year as being potentially unfair against older pensioners who reached SPA pre 2016, against those younger pensioners who reached SPA post 2016, but the answer was basically that it's 'swings and roundabouts'.

I hope what you say is true but I suspect it isn't. My SP in 2023 will be higher than the nSP because of my NI contributions as at 2016. It would be nice if all my pension was subject to the triple lock but I suspect the amount I get over the nSP amount will be subject to CPI. But I can't find anything that explicitly states this this, so maybe I will be in luck. 

It is explicitly mentioned in several official documents.  Anything above the new maximum pension is known as the protected payment and is increased by CPI only.

Annual increases

The new State Pension increases each year by whichever is the highest:

• earnings – the average percentage growth in wages (in Great Britain)
• prices – the percentage growth in prices in the UK as measured by the Consumer Prices Index (CPI)
• 2.5%

If you have a protected payment, it increases each year in line with the CPI.

https://www.gov.uk/new-state-pension/how-its-calculated

jimi_man

OldMusicGuy said:

jimi_man said:

Hi

It doesn't make any difference how it's made up. For those reaching SPA post 2016, then the nSP will apply and therefore the triple lock applies to the whole amount.

This was queried in the Lords late last year as being potentially unfair against older pensioners who reached SPA pre 2016, against those younger pensioners who reached SPA post 2016, but the answer was basically that it's 'swings and roundabouts'.

I hope what you say is true but I suspect it isn't. My SP in 2023 will be higher than the nSP because of my NI contributions as at 2016. It would be nice if all my pension was subject to the triple lock but I suspect the amount I get over the nSP amount will be subject to CPI. But I can't find anything that explicitly states this this, so maybe I will be in luck. 

Just to reiterate, from the same Govt paper...

'... The effect is that for people who reach State Pension age from 6 April 2016, the triple lock applies to the full rate of their new State Pension,...' 

Edit - Just seen the above, so ignore this!

molerat

jimi_man said:

OldMusicGuy said:

jimi_man said:

Hi

It doesn't make any difference how it's made up. For those reaching SPA post 2016, then the nSP will apply and therefore the triple lock applies to the whole amount.

This was queried in the Lords late last year as being potentially unfair against older pensioners who reached SPA pre 2016, against those younger pensioners who reached SPA post 2016, but the answer was basically that it's 'swings and roundabouts'.

I hope what you say is true but I suspect it isn't. My SP in 2023 will be higher than the nSP because of my NI contributions as at 2016. It would be nice if all my pension was subject to the triple lock but I suspect the amount I get over the nSP amount will be subject to CPI. But I can't find anything that explicitly states this this, so maybe I will be in luck. 

Just to reiterate, from the same Govt paper...

'... The effect is that for people who reach State Pension age from 6 April 2016, the triple lock applies to the full rate of their new State Pension,...' 

Which does not apply to the protected payment, any amount above the full new state pension.  It is all about terminology, the full rate of the new state pension for anyone is £179.60 and will increase by the triple lock.

jimi_man

molerat said:

jimi_man said:

OldMusicGuy said:

jimi_man said:

Hi

It doesn't make any difference how it's made up. For those reaching SPA post 2016, then the nSP will apply and therefore the triple lock applies to the whole amount.

This was queried in the Lords late last year as being potentially unfair against older pensioners who reached SPA pre 2016, against those younger pensioners who reached SPA post 2016, but the answer was basically that it's 'swings and roundabouts'.

I hope what you say is true but I suspect it isn't. My SP in 2023 will be higher than the nSP because of my NI contributions as at 2016. It would be nice if all my pension was subject to the triple lock but I suspect the amount I get over the nSP amount will be subject to CPI. But I can't find anything that explicitly states this this, so maybe I will be in luck. 

Just to reiterate, from the same Govt paper...

'... The effect is that for people who reach State Pension age from 6 April 2016, the triple lock applies to the full rate of their new State Pension,...' 

Which does not apply to the protected payment, any amount above the full new state pension.  It is all about terminology, the full rate of the new state pension for anyone is £179.60 and will increase by the triple lock.

Yes, reading it again its does actually say that.Thanks.

LadyTC

A friend of my husband worked on the early project management for the new compulsory pension in 2008 and he says the Gov then wanted to push salary sacrifice as a sweetener for employers to save money on NIC as they were likely to object to the new pension system!  Could be some truth in that - politicians running scared and all that!!

There has been so much chatter about changing this and that but a simple cut may be to reduce the amount you can put into a pension plan in the first place.

It does look like this has got legs this time round though.

michaels

I wonder if something might be done in conjunction with social care and be presented as a quid pro quo along the lines of 'national (long term care) insurance' contributions deducted from pension income to pay for a cap on care home fees?

C_Mababejive

i do begin to despair> We have been fed the message for decades that if we work hard, provide for ourselves then all will be well and the conservatives will smile upon us. Now we are told that pensioners have to be the whipping boys for mythical debt and that they want to attack pensions.

The LTA is not particularly high when you consider a pot of say £1m and the income and taxation that flows from it.

It seems to me that nothing is safe any more. The next step will be to attack ISAs.

Best not to get involved it the financial system. Swap your fake money for tangible assets as soon as you can and keep as much of it off the books.

Albermarle

The LTA is not particularly high when you consider a pot of say £1m and the income and taxation that flows from it.

Except in the large majority of cases a significant proportion of the One Million will have been free money from the government in the form of very generous 40% tax relief plus some 'free money' from an employer . So even if some more is taken back,  most people in the enviable position of having a Million Pounds pension pot , will be quids in still.