Budget 15th March2023, any pension changes predictions or views?

Universidad

zagfles said:

Let me remind you what you said: "You can take money out of your SIPP any time you like".

You're quite right, I totally mis-stated my point here.

But the point is - from the government perspective, a SIPP is pretty much entirely about tax (as a means to achieve various ends).

It has nothing to do with who owns the pot, and everything to do with the fact that if you have a SIPP you've already playing the tax efficiency game.

zagfles

Universidad said:

zagfles said:

Let me remind you what you said: "You can take money out of your SIPP any time you like".

You're quite right, I totally mis-stated my point here.

But the point is - from the government perspective, a SIPP is pretty much entirely about tax (as a means to achieve various ends).

It has nothing to do with who owns the pot, and everything to do with the fact that if you have a SIPP you've already playing the tax efficiency game.

I'm not sure what point you're trying to make. That the govt can change the rules of a tax wrapper? Of course they can, as they could change the rules about tax on investments you have outside a tax wrapper. Eg they could increase CGT, they could apply CGT to owner occupied houses (actually that's a good one), they could increase IHT, they could introduce a wealth tax, they could apply a capital levy.

artyboy

zagfles said:

Universidad said:

zagfles said:

Let me remind you what you said: "You can take money out of your SIPP any time you like".

You're quite right, I totally mis-stated my point here.

But the point is - from the government perspective, a SIPP is pretty much entirely about tax (as a means to achieve various ends).

It has nothing to do with who owns the pot, and everything to do with the fact that if you have a SIPP you've already playing the tax efficiency game.

I'm not sure what point you're trying to make. That the govt can change the rules of a tax wrapper? Of course they can, as they could change the rules about tax on investments you have outside a tax wrapper. Eg they could increase CGT, they could apply CGT to owner occupied houses (actually that's a good one), they could increase IHT, they could introduce a wealth tax, they could apply a capital levy.

I'd be more worried about a reintroduction of window tax. Or maybe tax on beards.

Mind you, given all this boils down to getting more people back into employment, reopening the workhouses should dovetail nicely with enhanced childcare provision 

kinger101

artyboy said:

zagfles said:

Universidad said:

zagfles said:

Let me remind you what you said: "You can take money out of your SIPP any time you like".

You're quite right, I totally mis-stated my point here.

But the point is - from the government perspective, a SIPP is pretty much entirely about tax (as a means to achieve various ends).

It has nothing to do with who owns the pot, and everything to do with the fact that if you have a SIPP you've already playing the tax efficiency game.

I'm not sure what point you're trying to make. That the govt can change the rules of a tax wrapper? Of course they can, as they could change the rules about tax on investments you have outside a tax wrapper. Eg they could increase CGT, they could apply CGT to owner occupied houses (actually that's a good one), they could increase IHT, they could introduce a wealth tax, they could apply a capital levy.

I'd be more worried about a reintroduction of window tax. Or maybe tax on beards.

Mind you, given all this boils down to getting more people back into employment, reopening the workhouses should dovetail nicely with enhanced childcare provision 

Easily avoided by bricking up your beard

Spreadsheet_Addict

Universidad said:

Spreadsheet_Addict said:

Universidad said:

Spreadsheet_Addict said:

I already think the change to 57 is unjustified- after all its our own money.

How much tax did you pay on it?

I will pay tax when I draw it, like everyone else. Your point?

Are you one of the people who thinks the government owns our income and we are "gifted" tax relief?

I earned it through hard work. I'll pay tax when I withdraw it.  Tax is deferred, not avoided and when I draw my pension and spend it, it'll help the economy as much as anyone in work.

I don't think the government owns our income, but it has a right to a portion of it. The idea that people own the product of their labour is a bit more left wing than I can get behind. Fair play to you though.

Regardless of our opinions, the practical fact of the matter is that the government can tax your income, and can choose to make changes to the rate of tax any time it likes, and that is all that has happened here.

You can take money out of your SIPP any time you like, you just pay more tax if you take it out earlier than certain thresholds. 

It being your own money has little to do with it. You didn't pay tax on the money when you earned it, and you will pay tax when you withdraw it. The government will choose how much.  You put it in a government approved tax wrapper. Guess who controls how that is taxed...

It's not fair, I'd agree with that. Like you, I am truly over having my retirement pulled out of my reach.

But it being your own money is really beside the point.

It really isn't beside the point. I'm not arguing that the government has no right to tax income I take from a pension. I'm arguing the injustice of changing the rules to prevent people takimg their private or workplace pension (in many cases with actuarial reduction) at 55 instead of 57 or 58. It's ACCESS to my own money being restricted I am objecting to.


I also disagree that the concept of people owning the fruits of their labour is left wing. It's the exact opposite.  I traded my time and effort for money as part of a contract with employers. That money is mine. Not the government's or anyone else's. Tax is part of life and governments are entrusted with the authority to raise it. It's still my money they apply those tax obligations to.

They are also expected to make changes only in line with the authority they were given in an election. There was no manifesto commitment and therefore authority given to the government to raise the age at which private individuals can access their pension savings.

LHW99

They are also expected to make changes only in line with the authority they were given in an election.

Not sure that has ever happened with any government of any persuasion.

It's ACCESS to my own money being restricted I am objecting to.

How about no limits on any pension contributions - but no tax reliefs either. Eliminates sal-sac immediately, helps those who are prepared to live at a low level for a year or so and pay in to pension at a level that would bring them below NMW.

Take as much as you like when you like, but be taxed at normal income tax rates (whether the original investor or the beneficiary). No 25% tax free for anyone but no help apart from the SP if you don't save enough or run out too soon by overspending.

Makes the rules simpler, but not exactly an encouragement to invest in a pension (or to keep working) IMO.

Albermarle

LHW99 said:

They are also expected to make changes only in line with the authority they were given in an election.

Not sure that has ever happened with any government of any persuasion.

It's ACCESS to my own money being restricted I am objecting to.

How about no limits on any pension contributions - but no tax reliefs either. Eliminates sal-sac immediately, helps those who are prepared to live at a low level for a year or so and pay in to pension at a level that would bring them below NMW.

Take as much as you like when you like, but be taxed at normal income tax rates (whether the original investor or the beneficiary). No 25% tax free for anyone but no help apart from the SP if you don't save enough or run out too soon by overspending.

Makes the rules simpler, but not exactly an encouragement to invest in a pension (or to keep working) IMO.

I think the basics are already pretty simple.
With a pension you trade tax benefits ( and hopefully some free employer money ) against restricted access. If you decide to take the benefit ( nobody can force you ) , then you agree automatically to the downside, and that at any time the government can change the rules, either to your benefit ( pension freedoms for example) or your detriment .

Malthusian

Universidad said:

Your SIPP may not allow you to access your pension earlier than 55, but it's not against the law to do so, and HMRC have a specific tax rate in mind if you do it.

It is against the law. The above sentence is equivalent to "it's not against the law to drive over the speed limit, you just have to pay a specific charge to the Government if you do it". 
The "tax rate" is not a tax. A tax is a charge you pay to the Government for doing something they allow you to do. Unauthorised payment charges are fines/penalties aimed at discouraging people (specifically, pension trustees) from doing something they are not allowed to do. 
Pension schemes which pay out money to the member before they are eligible (or any other "unauthorised payment") are subject to a 55% unauthorised payment charge and surcharge, a scheme sanction charge of at least 15%, and potentially the entire scheme being wound up and a 40% deregistration charge applied to all the scheme's assets, including those of members who had nothing to do with the liberation. 
This is why no pension scheme will deliberately make unauthorised payments unless it is run by scammers.
"You can liberate your pension before 55 if you pay 55% tax" is a myth.
Anyway, this is beside the wider point you were making, which I agree with. You play the Government's game, you play by their rules.

RogerPensionGuy

artyboy said:

zagfles said:

Universidad said:

zagfles said:

Let me remind you what you said: "You can take money out of your SIPP any time you like".

You're quite right, I totally mis-stated my point here.

But the point is - from the government perspective, a SIPP is pretty much entirely about tax (as a means to achieve various ends).

It has nothing to do with who owns the pot, and everything to do with the fact that if you have a SIPP you've already playing the tax efficiency game.

I'm not sure what point you're trying to make. That the govt can change the rules of a tax wrapper? Of course they can, as they could change the rules about tax on investments you have outside a tax wrapper. Eg they could increase CGT, they could apply CGT to owner occupied houses (actually that's a good one), they could increase IHT, they could introduce a wealth tax, they could apply a capital levy.

I'd be more worried about a reintroduction of window tax. Or maybe tax on beards.

Mind you, given all this boils down to getting more people back into employment, reopening the workhouses should dovetail nicely with enhanced childcare provision 

I agree that after 11/12 years of tinkering with pensions and now hopefully resetting back to the basic rules made in 2005/6 will indeed get more people happier to work longer, rejoin the workforce and probably do overtime or extra paid income to achieve prudent pension plans helping all society in the process. 

Plus helping with the costs of childcare will help that end of the workforce be employed and also starting to prudently save in pensions. 

Both the above will get more people back in the UK workforce and reduce wage inflation that is currently out of control and just embedding long-term sticky inflation that is just so painful to so many people. 

Another result of the above is they will lose less votes next election and just maybe they will get back in to power after 4 or 5 years of watching the other side in control.

Albermarle

I agree that after 11/12 years of tinkering with pensions and now hopefully resetting back to the basic rules made in 2005/6 will indeed get more people happier to work longer, rejoin the workforce and probably do overtime or extra paid income to achieve prudent pension plans helping all society in the process.

Although considering the high levels of public ignorance about personal finance, even amongst higher earners,  I wonder how many will even understand what changes in pensions LTA and AA really mean, never mind see them as an incentive to work longer/harder. Notwithstanding the fact that the large majority of workers on average pay or thereabouts, will never be troubled by these issues anyway. At most it will maybe influence a very small % of professionals to alter their plans, at a relatively high cost to the Treasury ( £2 billion?) 

Although will probably save a me a few quid, so