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

RogerPensionGuy

Interesting to see so many comments abouts salary sacrifice or smart pension contributions. 

The above system works very well on absolutely loads of fronts and if it was stopped there would be lots of unhappiness with many voters.

I think every pension scheme should allow employees to enjoy the salary sacrifice smart pension route if employee desires.

draiggoch

In some ways I think salary sacrifice pension contributions are fairer for those below the 40% tax rate. Since they pay 32% with NI where as higher rate tax payers pay 42%. Balances the benefit a bit more.

NedS

draiggoch said:

In some ways I think salary sacrifice pension contributions are fairer for those below the 40% tax rate. Since they pay 32% with NI where as higher rate tax payers pay 42%. Balances the benefit a bit more.

Agreed, but what about those who work for employers that do not offer salary sacrifice? They are stuck paying 12% NICs and only benefit from 20% tax relief.

draiggoch

NedS said:

draiggoch said:

In some ways I think salary sacrifice pension contributions are fairer for those below the 40% tax rate. Since they pay 32% with NI where as higher rate tax payers pay 42%. Balances the benefit a bit more.

Agreed, but what about those who work for employers that do not offer salary sacrifice? They are stuck paying 12% NICs and only benefit from 20% tax relief.

I agree with the sentiment but at least a proportion of basic rate tax payers are getting closer to the 40% higher rate payers get. Scrapping salary sacrifice pension contributions would penalise basic tax payers more.

dunstonh

RogerPensionGuy said:

Interesting to see so many comments abouts salary sacrifice or smart pension contributions. 

The above system works very well on absolutely loads of fronts and if it was stopped there would be lots of unhappiness with many voters.

I think every pension scheme should allow employees to enjoy the salary sacrifice smart pension route if employee desires.

Salary sacrifice was a niche option that barely cost hte treasury anything.  Now it is one of the biggest costs for the pension wrapper.  

Most voters dont even know it exists or what it is.

Workerdrone

draiggoch said:

In some ways I think salary sacrifice pension contributions are fairer for those below the 40% tax rate. Since they pay 32% with NI where as higher rate tax payers pay 42%. Balances the benefit a bit more.

Im in exactly that situation. Id be unhappy with the loss of salary sacrifice. Perhaps scrap salary sacrifice for HR taxpayers :-)

Grumpy_chap

Workerdrone said:

draiggoch said:

In some ways I think salary sacrifice pension contributions are fairer for those below the 40% tax rate. Since they pay 32% with NI where as higher rate tax payers pay 42%. Balances the benefit a bit more.

Im in exactly that situation. Id be unhappy with the loss of salary sacrifice. Perhaps scrap salary sacrifice for HR taxpayers :-)

Would you determine the HR status on the before or after SS Salary?

deltrotter

https://www.dailymail.co.uk/news/article-11841951/Boost-middle-class-workers-Jeremy-Hunt-plans-raise-pension-cap.html

RogerPensionGuy

https://www.dailymail.co.uk/news/article-11841951/Boost-middle-class-workers-Jeremy-Hunt-plans-raise-pension-cap.html

RogerPensionGuy

draiggoch said:

In some ways I think salary sacrifice pension contributions are fairer for those below the 40% tax rate. Since they pay 32% with NI where as higher rate tax payers pay 42%. Balances the benefit a bit more.

Reading this post reminds me so much output about pension input savings and benefits whereby the headlines nearly always just talk about typically 20% or 40% input savings on standard income tax or higher income tax but, with smart pension or salary sacrifice the savings are 32% and 42% currently and the employer will probably plonk another 8,10 or 12% in on top as they typically saving 13.8% employer NI contributions. 

The pension system has grown out of control these last 18 years.

I know younger people force feeding pensions now because they have little confidence in the system and are worried about negative changes in the future and indeed as the press are saying loads of good older working and very employable people are leaving the UK workforce. 

It's a mess, it needs to be more simple, fairer and stop changing and moving all the different pension goal posts at every opportunity, hopefully stability and long-term planning views will be adopted next Wednesday.