"Labour stole my money"

xylophone

So, if I had £100 invested with a 5% dividend, then previously I would have been able to make an extra £1 by reclaiming the dividend tax back?

  See here

https://en.wikipedia.org/wiki/Advance_corporation_tax

jamesd

barnstar2077 said:

So, if I had £100 invested with a 5% dividend, then previously I would have been able to make an extra £1 by reclaiming the dividend tax back?

Obviously this would accumulate over years, but I don't see this turning £40 a month in to £200 by itself.  As was suggested above, he must also have had bad timing, and I would suspect he was only putting in a fraction of what we would recommend people put into their pensions these days. 

Yes. For two whole years from 1997-98 to 1998-99, after which the whole Advance Corporation Tax that the refund was for was scrapped. It was replaced by a dividend tax of 10% and that could be reclaimed. Dividends received by pension funds are exempt from dividend tax, including those we hold as individuals.

The claim is a bogus one, people remembering or mentioning the removal of the tax refund in 1997 but not mentioning that the whole tax was abolished in 1999 and replaced with dividend tax and credits.

What probably happened was a combination of two over-optimistic things:

1. Projection of 80s and 90s high market returns into the future that didn't replicate that boom market
2. Lower annuity rates

In addition the projections would normally have had the £40 increase each year with inflation and he probably didn't do that.

GunJack

Thrugelmir said:

DoctorStrange said:

I wonder if the advisor would blame the Government rather than admit poor advice and/or management...

Sped up the closure of many DB schemes to new members in the years that followed. 

Indeed.... my current DB stopped to new joiners in 2009, they went on to a DC scheme (albeit with a 2x match up to 5% employee -10% company contributions)

Pablo7474

Good luck I say, maybe try and find a lighter conversation with him next time 😂

barnstar2077

Pablo7474 said:

Good luck I say, maybe try and find a lighter conversation with him next time 😂

Unfortunately I don't think that will be possible.   From his daughters reaction, and the way he spoke, he only seems to have a few subjects at his disposal.  I think limiting exposure will be the way forward : ) 

Pablo7474

Haha and if he is only getting £40 per month from his pension I guess lunch isn’t on him either 🤣

Workerdrone

barnstar2077 said:

Pablo7474 said:

Good luck I say, maybe try and find a lighter conversation with him next time 😂

Unfortunately I don't think that will be possible.   From his daughters reaction, and the way he spoke, he only seems to have a few subjects at his disposal.  I think limiting exposure will be the way forward : ) 

Puts me in mind of this scene from Death becomes her

Eldi_Dos

Thrugelmir said:

DoctorStrange said:

The idea was to encourage companies to reinvest into the business and grow it, rather than just give money been to the shareholders, but the move did accelerate the demise of DB schemes in the private sector.

The money went to the Treasury and the funding of Brown's grandoise welfare state plans. 

Or used to bring the infrastructure of our schools up to a modern acceptable standard. Our schools were in far better shape when Blair/Brown left office than what they found when taking office.
Young people today are seeing the benefits of the investments in schools made then.

prowla

It was just another stealth tax in the NuLab regime's grandiose "end to boom and bust" lie.

Linton

DB schemes werre on their way out before 1997.  When I joined a well known multi-national in 1994 their UK DB scheme had just been effectively closed to new entrants.