Mortgage Free But No Pension

TheAble

Eco_Miser said:

TheAble said:

kidmugsy said:

Eco_Miser said:

TheAble said:

resk said:

Albermarle said: 95% income tax anyone? 

Wiki: "In 1971, the top rate of income tax on earned income was cut to 75%. A surcharge of 15% on investment income kept the overall top rate on that income at 90%. In 1974 the top tax rate on earned income was again raised, to 83%. With the investment income surcharge this raised the overall top rate on investment income to 98%, the highest permanent rate since the war."

Not quite sure why this is relevant. You can't do much about the prevailing top rate of income tax but you can take steps to ensure you don't need to be reliant on the state pension.

What steps would they be, when the government can take 98% of your investment income?

It's a demonstration that you are dependent on government policy for your financial well being, whatever you try to do.

Ok, true. But people on similar incomes, in similar circumstances, all suffering the average ups and downs of life, can end up with vastly different levels of wealth and financial well-beings - and that's largely a result of choices and decisions they make, irrespective of government policy. 

molerat

stef_saving said:

DairyQueen said:

Has your OH checked his state pension forecast? Is he paying Class 2 NI contributions? If not, I suggest he gets right onto it. 

Probably a good idea to check your SP forecast too. 

Good tip - I didn't know I could do this! Just checked and mine is £9,371 per year and I would imagine his would be too, as he's always paid NI. Probably a stupid question, but will this increase with inflation or is this the actual figure I will receive? A joint income of £18k with no income tax on it in today's money sounds pretty reasonable to me!

Is that amount what you actually have or the amount forecast in the future.  You need to look at all the figures stated.  You really do need you OH to check his forecast as well - never assume anything.  The person claiming child benefit for a child under 12 will also be receiving NI credits towards the SP so transferring those could be an option if necessary to fill some gaps.

kidmugsy

TheAble said:

kidmugsy said:

Wiki: "In 1971, the top rate of income tax on earned income was cut to 75%. A surcharge of 15% on investment income kept the overall top rate on that income at 90%. In 1974 the top tax rate on earned income was again raised, to 83%. With the investment income surcharge this raised the overall top rate on investment income to 98%, the highest permanent rate since the war."

Not quite sure why this is relevant. 

It was in response to "Albermarle said: 95% income tax anyone?"  There might be people so naive that they have no idea that income tax above 95% was in effect as recently as the late 70s.

Eco_Miser

kidmugsy said:

TheAble said:

kidmugsy said:

Wiki: "In 1971, the top rate of income tax on earned income was cut to 75%. A surcharge of 15% on investment income kept the overall top rate on that income at 90%. In 1974 the top tax rate on earned income was again raised, to 83%. With the investment income surcharge this raised the overall top rate on investment income to 98%, the highest permanent rate since the war."

Not quite sure why this is relevant. 

It was in response to "Albermarle said: 95% income tax anyone?"  There might be people so naive that they have no idea that income tax above 95% was in effect as recently as the late 70s.

It was actually Eco_Miser  who said that, the attributions got mixed up when quotes were trimmed.

I said 95% because I remembered the Beatles' Taxman:  'There's one for you, nineteen for me'. Turns out the actual tax was higher.

Hexane

resk said:

Albermarle said:

Put it this way, I'm a similar age to the OP and I'm not banking on there being any state pension at all when I retire.

The likelihood of the state pension being withdrawn is approx zero .

It would be political suicide of the highest order for an government to even mention it , never mind actually do it.

Even hinting at reducing the generous triple lock increases brings howls of protest from older people , who are the ones who vote the most .

Whenever I see or hear 20/30/40-somethings saying, or being told, that they won't get a state pension when they are older, I always wonder how many years, or decades, people have been saying the same thing.  

People were saying it 15 years ago, certainly. Some of the responses were "well I'm not planning to live that long so it doesn't matter", which I guess is the other extreme of silliness.