Please come back

Martin_the_Unjust

nigelbb said:

Martin_the_Unjust said:

I know some won’t like this but one of (if not the only) benefit of brexit is that, with the reduction in the availability of workers, it has given some power back to those working in the lower paid jobs.

That could have been accomplished with less disruption to the rest of us by outlawing zero hours contracts & raising the minimum wage.

Raising minimum wage would just have encouraged more of the low paid in Europe into the UK.

MoneySavingGerbil

NedS said:

nigelbb said:

The obvious measure to raise government income & incentivise early retirees back to work is to make unearned income subject to National Insurance for those below state pension age.

Wouldn't that mean double taxation of pensions. If I've paid NI on pensionable earnings and then pay NI again when drawing that pension, I'm being taxed (NI) twice on the same earnings and would be worse off as a result.

Possibly, but a whole bunch of people (my wife and I included) had the good fortune to make most of our DC contributions into a salary sacrifice scheme so never paid NI on contributions in the first place. Not sure the govenrnment has the records or the gumption to address that equitably were unearned income to be subject to NI.

It still boggles my mind that in conversations with colleagues that occasionally touch on pensions some of them never signed up to the salary sacrifice scheme when it was offered to them. These are intelligent people, but either they never did the research or just thought reducing your salary sounded like voodoo.

Brie

So people will be able to go into the job centre to get help?? 

Well that didn't work for me this last year.  No one seemed to know how working part time would effect state pension, at what point one had to pay NI, if there was any effect on pensions in general.  Oh and there was no parking anywhere near the job centre that I could access.  I was told to park a mile away at an Asda.  Where there's a 90 minute restriction on parking.  

In the end they couldn't (or wouldn't) make any accommodations for me when I started working a very small part time role on the one day of the week they wanted to meet with me.  No I couldn't have appointments on any other day because my NI number told their system I had to meet on Thursday mornings.  And they weren't able to do phone appointments but would randomly ring me and then log that I was refusing their calls (because I was working!).  And wouldn't give me a way to contact them - emails didn't get a response and the central number was only to leave my "advisor" a message.  To which they never responded.

I'm sure that the job centre works can help some people who have no idea how to get a job.  But if you are talking about someone who has worked already for 30+ years it's a completely different situation and they don't have a way to cope with individuals with intelligence and experience.

eastcorkram

MoneySavingGerbil said:

NedS said:

nigelbb said:

The obvious measure to raise government income & incentivise early retirees back to work is to make unearned income subject to National Insurance for those below state pension age.

Wouldn't that mean double taxation of pensions. If I've paid NI on pensionable earnings and then pay NI again when drawing that pension, I'm being taxed (NI) twice on the same earnings and would be worse off as a result.

Possibly, but a whole bunch of people (my wife and I included) had the good fortune to make most of our DC contributions into a salary sacrifice scheme so never paid NI on contributions in the first place. Not sure the govenrnment has the records or the gumption to address that equitably were unearned income to be subject to NI.

It still boggles my mind that in conversations with colleagues that occasionally touch on pensions some of them never signed up to the salary sacrifice scheme when it was offered to them. These are intelligent people, but either they never did the research or just thought reducing your salary sounded like voodoo.

I work in a dept consisting of ten people. They're all basically middle aged men, but I'm the oldest at 63. All been there for at least five years. I've been there for 12.

Before auto enrollment, it was a salary sacrifice scheme. I was the only person in it.

 When the auto enrollment came in, it wasn't sal sac, but mine stayed the same.

Five of the other nine opted out, and continue to opt out every time they are put back in . 

ZeroSum

MoneySavingGerbil said:

NedS said:

nigelbb said:

The obvious measure to raise government income & incentivise early retirees back to work is to make unearned income subject to National Insurance for those below state pension age.

Wouldn't that mean double taxation of pensions. If I've paid NI on pensionable earnings and then pay NI again when drawing that pension, I'm being taxed (NI) twice on the same earnings and would be worse off as a result.

Possibly, but a whole bunch of people (my wife and I included) had the good fortune to make most of our DC contributions into a salary sacrifice scheme so never paid NI on contributions in the first place. Not sure the govenrnment has the records or the gumption to address that equitably were unearned income to be subject to NI.

It still boggles my mind that in conversations with colleagues that occasionally touch on pensions some of them never signed up to the salary sacrifice scheme when it was offered to them. These are intelligent people, but either they never did the research or just thought reducing your salary sounded like voodoo.

Couple of pointe. You can't salary sacrifice if it takes you below min wage. Also public sector pensions aren't eligible for sal sac.

Instead of charging NI on pensions, it would be fairer to just abolish pension sal sac if the government were to go down that route 

michaels

NedS said:

nigelbb said:

The obvious measure to raise government income & incentivise early retirees back to work is to make unearned income subject to National Insurance for those below state pension age.

Wouldn't that mean double taxation of pensions. If I've paid NI on pensionable earnings and then pay NI again when drawing that pension, I'm being taxed (NI) twice on the same earnings and would be worse off as a result.

Only if you were taking your pension below state pension age which is optional so take advantage of early retirement and you have to pay more tax - the suggestion is this is a policy to help with the issue of too many people deciding to leave the workforce 'early' as they have decided that the extra spending that working more years might bring is not worth the time/stress of the work.

Perhaps a concrete example - if I worked one more year than planned I could spend £2k more a year in retirement for 10 years - so perhaps 10 years of one long haul holiday a year rather than a European one or a lease car costing 400pm rather than 200pm.  Is it worth working an extra year for either of those benefits?  Not for me but others have different priorities.

Make my pension go 12% less far before I reach 67 by applying NI to drawdown and suddenly unless I work that extra year then that European holiday becomes a UK one and the car is tight to have at all and the extra year becomes much more attractive.

sheslookinhot

nigelbb said:

Martin_the_Unjust said:

I know some won’t like this but one of (if not the only) benefit of brexit is that, with the reduction in the availability of workers, it has given some power back to those working in the lower paid jobs.

That could have been accomplished with less disruption to the rest of us by outlawing zero hours contracts & raising the minimum wage.

That may well be right, but we have had zero input from the current government. They are only interested in enriching themselves, not in the betterment of a fair society.

calcotti

Not sure this makes any policy difference but a couple of observations.

One group we might also consider are those who discover they have a life limiting illness who will never have a retirement beyond state pension age (or only a few years) and can use ‘pension freedoms’ to to enjoy a few years not working before their demise. 

I think too that treating people as becoming ‘economically inactive’ as automatically a bad thing for the country results from measuring everything in terms of impact on GDP and being obsessed with rates of GDP. Being economically inactive gives people the opportunity to take on different roles in society, not just having more time on leisure activities but also to support their families (for example babysitting grandchildren so the parents can afford to work, or in many cases to look after parents) or to volunteer.  Volunteer organisations are hugely skewed towards those who are retired or partially retired because younger people often simply don’t have the time due to work commitments or the time required to involve caring for young children. Volunteer groups play a larger role in society than ever from advice agencies to food banks.

Our individual roles in society are much greater than our economic activity. Financial security gives us greater choice which can allow us to avoid unhappiness but of itself doesn’t bring happiness.

nigelbb

NedS said:

nigelbb said:

The obvious measure to raise government income & incentivise early retirees back to work is to make unearned income subject to National Insurance for those below state pension age.

Wouldn't that mean double taxation of pensions. If I've paid NI on pensionable earnings and then pay NI again when drawing that pension, I'm being taxed (NI) twice on the same earnings and would be worse off as a result.

The whole idea is that you should be worse off so as to incentivise returning to work &/or raising revenue for the public finances. Of course pension contributions made via salary sacrifice aren't subject to NI.

njm123

nigelbb said:

The obvious measure to raise government income & incentivise early retirees back to work is to make unearned income subject to National Insurance for those below state pension age.

Not sure it would raise any more money or encourage anyone back to work from the intended groups as it would likely be subject to the same income limits as earned income and it wouldn't take much planning to smooth income and use tax wrappers to minimise the NI due to far less than any voluntary NI paid currently.

You might make a bit more from those working who have unearned income, but that's not the group that's the target of the proposed campaign.   

Any measure that specifically targeted the "Economically inactive" could get very politically uncomfortable for both Government and Opposition parties as it's likely to open a debate on how much the state should interfere with how people live their lives.