More budget speculation

zagfles

arnoldy said:

I think the most likely option will be to look at gradually increasing the LTA "multiple" - for example completely risk free fully index linked (no cap) with spousal benefits are valued at 20 X.

But if you could buy that on the open market it would be at least 40X. 

Settling on 25 X for capped DBs, and say 30 X for fully index linked pensions would start to address the gross unfairness in LTA application. 

And cause further problems in the NHS where doctors are already retiring early/cutting hours because pension taxation is making it not worth working? Virtually zero chance of that happening. 

pip895

zagfles said:

There are LTA checks after death

Only up to 75 - I should have said post age 75 death perhaps.  Currently my intention is to spend SIPP money prior to age 75 then stop completely and after 75 and rely on ISAs, but I expect that things will be changed in the next few years to negate such a plan.  Still good to have a plan I suppose, but I'm glad I didn't have to spend good money in forming it.

Albermarle

I guess middle-to-old-age Britain form a decent chunk of the Tory vote, so they would be loathe to alienate such swathes of "their people"

Although for sure the DT/Express/Mail will try to whip up a frenzy of indignation amongst Middle England Tories, I wonder how many people would actually be affected in reality, or even understand any changes made .

zagfles

pip895 said:

zagfles said:

There are LTA checks after death

Only up to 75 - I should have said post age 75 death perhaps.  Currently my intention is to spend SIPP money prior to age 75 then stop completely and after 75 and rely on ISAs, but I expect that things will be changed in the next few years to negate such a plan.  Still good to have a plan I suppose, but I'm glad I didn't have to spend good money in forming it.

But it's tested at 75, so no need post 75 whether at death or crystallisation. Unless you're thinking of a BCE5A equivalent ie on growth minus withdrawals at death as well as 75? It would overcomplicate dealing with someone's death for little gain.

michaels

I guess part of the political calcs is will votes be pushed elsewhere or disappear to an extent that matters.  I suspect that if you are in the group where a pension is part of your IHT plans you will still have a big enough vested interest in not seeing a govt that isn't the Tories to vote for them anyway.  It is rather hard to see any other party saying they would reverse a move to bring pensions into the scope of IHT!  It could be portrayed as part of a quid-pro-quo with the cap on car home fees.

Flugelhorn

ugh and there was me thinking my untouchable pension pot could pay the IHT 

Albermarle

Flugelhorn said:

ugh and there was me thinking my untouchable pension pot could pay the IHT 

I would not panic yet, as it is just pre budget speculation and unlikely to be a wholesale change overnight . Presumably the fact that Pensions are held in trust, would mean it would not be the same as a simple change of tax policy .

However when the IFS guy attacked pension tax breaks as "indefensibly generous" and "very, very beneficiant", you can maybe feel change is in the air.

pip895

zagfles said:

pip895 said:

zagfles said:

There are LTA checks after death

Only up to 75 - I should have said post age 75 death perhaps.  Currently my intention is to spend SIPP money prior to age 75 then stop completely and after 75 and rely on ISAs, but I expect that things will be changed in the next few years to negate such a plan.  Still good to have a plan I suppose, but I'm glad I didn't have to spend good money in forming it.

But it's tested at 75, so no need post 75 whether at death or crystallisation. Unless you're thinking of a BCE5A equivalent ie on growth minus withdrawals at death as well as 75? It would overcomplicate dealing with someone's death for little gain.

It could just be the same check to assess growth from the crystallised amount that's done at 75.  If one was to make 90 (assuming crystallisation at ~LTA at 60) then 30 odd years of inflation could make the pot much less valuable if it wasn't allowed to grow at all..  The rule change might make people more inclined to use gifting to pass on wealth which would be no bad thing I guess..

Thrugelmir

Albermarle said:

Flugelhorn said:

ugh and there was me thinking my untouchable pension pot could pay the IHT 

However when the IFS guy attacked pension tax breaks as "indefensibly generous" and "very, very beneficiant", you can maybe feel change is in the air.

Looking at the bigger macro picture. There's a huge void to be filled. No stone is going to be left unturned. People with capital have become wealthier and wealthier by doing little of a productive nature. Time for some of the free lunches received to be returned. 

michaels

Thrugelmir said:

Albermarle said:

Flugelhorn said:

ugh and there was me thinking my untouchable pension pot could pay the IHT 

However when the IFS guy attacked pension tax breaks as "indefensibly generous" and "very, very beneficiant", you can maybe feel change is in the air.

Looking at the bigger macro picture. There's a huge void to be filled. No stone is going to be left unturned. People with capital have become wealthier and wealthier by doing little of a productive nature. Time for some of the free lunches received to be returned. 

I think you'll find that is how capitalism works, people with savings lend them to entrepreneurs who invest them to produce returns, a share of which goes to the savers.