Can't trust government with pensions

Albermarle

Who can you trust with your pension?  AS above, who else would you trust?

Also despite their many failings I would rather trust a UK government with my pension than a Russian or Somali one !

Also the current pension tax regime is very generous for higher rate taxpayers , even more if a salsac arrangement , so will be difficult to justify complaining too loudly if it is adjusted .

michaels

atush said:

Barry_Bear said:

There are reports that the government may target private pensions to raise taxes.

The lifetime allowance has been reduced before and could be yet again!

How can you expect people to save for the future when they can see our governments have a track record of moving the goal posts and a financial crisis means our governments tend to target those who have saved into pensions?

Who can you trust with your pension?  AS above, who else would you trust?

Yes, tax regimes can change, but sometimes they need to.  Who else is going to pay for the pandemic but companies, the govt, and individuals?

Bit of a bizarre way of looking at things, the govt can not pay for anything, they are not an entity, govt income is from taxation, borrowing merely being pulling forward future tax.  Sure they do redistribute, the most productive higher earners are the main contributors with most others being net recipients but the govt itself only move money around, it doesn't earn it and store it for future disbursement in the way individuals have income and wealth.  Same is true of companies, company taxation is bourne by the customers, workers and owners (mostly pension holders).

So to whatever extent the pandemic needs to be paid for, it will be done by taking a share of income or assets of those who work or hold assets.

michaels

More on topic - I can see that there might be some linkage proposed between pensions and paying for social care. 

Perhaps a specific 'national insurance fund' for social care in old age paid for via a 'NI' levy on pension income?  I know the talk is of pooling risk so perhaps instead of a levy on pension income it could instead be applied to inheritances of pensions?

Albermarle

michaels said:

More on topic - I can see that there might be some linkage proposed between pensions and paying for social care. 

Perhaps a specific 'national insurance fund' for social care in old age paid for via a 'NI' levy on pension income?  I know the talk is of pooling risk so perhaps instead of a levy on pension income it could instead be applied to inheritances of pensions?

That sounds like a potentially good idea . Funding social care properly is an issue that has been kicked into the long grass by successive governments, but it seems that further inaction will prove politically unpopular and 'something must be done'.
Until I read it on this forum I had no idea that pension pots can be passed down the family  generations in a tax friendly way , So I guess >95% of the population would be unaffected  if there was a change but if it means more money for social care then it could be sold as a good thing.
Only point I would make is not all Adult social care is for older people/pensioners .

NedS

Albermarle said:

michaels said:

More on topic - I can see that there might be some linkage proposed between pensions and paying for social care. 

Perhaps a specific 'national insurance fund' for social care in old age paid for via a 'NI' levy on pension income?  I know the talk is of pooling risk so perhaps instead of a levy on pension income it could instead be applied to inheritances of pensions?

That sounds like a potentially good idea . Funding social care properly is an issue that has been kicked into the long grass by successive governments, but it seems that further inaction will prove politically unpopular and 'something must be done'.
Until I read it on this forum I had no idea that pension pots can be passed down the family  generations in a tax friendly way , So I guess >95% of the population would be unaffected  if there was a change but if it means more money for social care then it could be sold as a good thing.
Only point I would make is not all Adult social care is for older people/pensioners .

Given social care costs may be huge for some and non-existent for others, a pooled approach to the risk definitely seems sensible, whether that be funded through current taxation or by some new or increased tax.

I can see pensions quickly becoming someone's largest asset - I know my pension is worth more than my property. If one is able to build a large DC pension pot and live off a sustainable drawdown rate that leaves the pot intact to pass on to the next generation AND they have also built a pot of their own, one can easily see how that inherited wealth can quickly grow. Question: does an inherited pension then form part of your lifetime allowance, thus limiting the benefits of passing on pensions where the lifetime allowance would be breached?

zagfles

NedS said:

Albermarle said:

michaels said:

More on topic - I can see that there might be some linkage proposed between pensions and paying for social care. 

Perhaps a specific 'national insurance fund' for social care in old age paid for via a 'NI' levy on pension income?  I know the talk is of pooling risk so perhaps instead of a levy on pension income it could instead be applied to inheritances of pensions?

That sounds like a potentially good idea . Funding social care properly is an issue that has been kicked into the long grass by successive governments, but it seems that further inaction will prove politically unpopular and 'something must be done'.
Until I read it on this forum I had no idea that pension pots can be passed down the family  generations in a tax friendly way , So I guess >95% of the population would be unaffected  if there was a change but if it means more money for social care then it could be sold as a good thing.
Only point I would make is not all Adult social care is for older people/pensioners .

Given social care costs may be huge for some and non-existent for others, a pooled approach to the risk definitely seems sensible, whether that be funded through current taxation or by some new or increased tax.

I can see pensions quickly becoming someone's largest asset - I know my pension is worth more than my property. If one is able to build a large DC pension pot and live off a sustainable drawdown rate that leaves the pot intact to pass on to the next generation AND they have also built a pot of their own, one can easily see how that inherited wealth can quickly grow. Question: does an inherited pension then form part of your lifetime allowance, thus limiting the benefits of passing on pensions where the lifetime allowance would be breached?

No, an LTA test is only done on the original pension holder, ie the deceased, if they died under 75 with uncrystallised funds and they're designated for a beneficary's drawdown within 2 years.

MACKEM99

NedS said:

Albermarle said:

michaels said:

More on topic - I can see that there might be some linkage proposed between pensions and paying for social care. 

Perhaps a specific 'national insurance fund' for social care in old age paid for via a 'NI' levy on pension income?  I know the talk is of pooling risk so perhaps instead of a levy on pension income it could instead be applied to inheritances of pensions?

That sounds like a potentially good idea . Funding social care properly is an issue that has been kicked into the long grass by successive governments, but it seems that further inaction will prove politically unpopular and 'something must be done'.
Until I read it on this forum I had no idea that pension pots can be passed down the family  generations in a tax friendly way , So I guess >95% of the population would be unaffected  if there was a change but if it means more money for social care then it could be sold as a good thing.
Only point I would make is not all Adult social care is for older people/pensioners .

Given social care costs may be huge for some and non-existent for others, a pooled approach to the risk definitely seems sensible, whether that be funded through current taxation or by some new or increased tax.

I can see pensions quickly becoming someone's largest asset -  . If one is able to build a large DC pension pot and live off a sustainable drawdown rate that leaves the pot intact to pass on to the next generation AND they have also built a pot of their own, one can easily see how that inherited wealth can quickly grow. Question: does an inherited pension then form part of your lifetime allowance, thus limiting the benefits of passing on pensions where the lifetime allowance would be breached?

know my pension is worth more than my property

so is mine I live in a tent.

Barry_Bear

A few comments have been keen to dismiss the reports of changes as just speculation and nothing more. Although everything can be called speculation, the fact is the government has a track record of moving the goal posts before.

Typical of the short-termism that plagues our system of government actions that erode long-term trust are not going to encourage people to save now to plan for their futures.

michaels

Barry_Bear said:

A few comments have been keen to dismiss the reports of changes as just speculation and nothing more. Although everything can be called speculation, the fact is the government has a track record of moving the goal posts before.

Typical of the short-termism that plagues our system of government actions that erode long-term trust are not going to encourage people to save now to plan for their futures.

To be fair the changes tend to be at the tinkering end of the spectrum whilst every year there is lots of gnashing and wailing about the threat of systematic changes

Thrugelmir

sheslookinhot said:

atush said:

Barry_Bear said:

There are reports that the government may target private pensions to raise taxes.

The lifetime allowance has been reduced before and could be yet again!

How can you expect people to save for the future when they can see our governments have a track record of moving the goal posts and a financial crisis means our governments tend to target those who have saved into pensions?

Who can you trust with your pension?  AS above, who else would you trust?

Yes, tax regimes can change, but sometimes they need to.  Who else is going to pay for the pandemic but companies, the govt, and individuals?

The Government can pay for the effects of the pandemic by amongst others, cancelling HS rail link, nuclear weapons and the  proposed “ royal” boat.

Still a long way short of the amount required to balance the books.