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

RogerPensionGuy

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.

What a great post showing just one of the unfairness parts of the current pension rules mess.

MK62

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.

Plus the 1.6 million workers on minimum wage, who can't take advantage of a salary sacrifice scheme even if their employer operates one.

Either make all pension contributions subject to NI, or none at all.......fair all round then (and would make salary sacrifice a bit pointless).

westv

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.

That's the fault of their employers not the Government. 

vacheron

westv said:

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.

That's the fault of their employers not the Government. 

I agree, It’s a perfectly lawful thing to do, there are even guides on the government website advising employers how to do it!

By the same argument, what about those who don’t get free childcare, or health insurance, or training courses? 

Newsflash, the world is not 100% fair and people who accept a job offer will do so in the full knowledge of the type of scheme their potential employer operates.

Also, if employees don’t have a scheme that suits them, they can lobby their employer to get one (as myself and many of my friends have done), or they can move jobs to an employer that offers a better scheme instead.

There are a few countries that followed a philosophy of each person being treated exactly equally. How did they work out? 😉

Andy_L

snowlaser said:

NedS said:

Rather than constantly raising State Pension Age, I would prefer to see the State Pension means tested ... , where it tapers off for people with pension income between £50k to £60K (or set your own limits as you feel appropriate). 

This is a dreadful idea.  If it was 60k on day 1 you can bet that within a few years it would be 10k and only the very poorest would get it, just like the LTA was £1.8m and then cut back, just like the 40% tax was for the "rich" originally and now hits the middle class

Etc etc

Don't give them an inch.  We should all be out in parliament square with placards if this is in the budget.

middle class or middle earners? 

NedS

westv said:

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.

That's the fault of their employers not the Government. 

Erm, what if the employer is the Government?

vacheron

NedS said:

westv said:

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.

That's the fault of their employers not the Government. 

Erm, what if the employer is the Government?

Then you’ll already have a lovely pension. 😉

Silvertabby

molerat said:

marlot said:

SouthCoastBoy said:

I can't see state pension being means tested, it's a massive vote loser and will also encourage people to retire earlier, the opposite of what the govt want

I agree.  I note that state pension is taxable, so anyone with >50k/year from other sources pays 40% on their state pension anyway.

But there is huge inequality between young and old.  Young are typically paying an extra 9% 'graduate tax', whereas old don't pay NI on earnings.  Arguably merging NI and income tax would go some way to fixing this. 

Many "oldies" never had the opportunity to have to pay "graduate tax", it is not something you have to pay it is down to the path you choose.  I don't agree with merging NI and tax but NI should be paid on earned income irrespective of age and all benefits should be brought into the tax system, especially the gateway benefits.

Contrary to popular belief, not all of us oldies enjoyed 'free' university education.  That was limited to just the 12%(ish) of school leavers whose parents could afford for them to continue 'swanning around in school instead of getting a job and bringing much needed money into the house'.

The only one my class who went on to university was a GP's daughter.

SouthCoastBoy

Silvertabby said:

molerat said:

marlot said:

SouthCoastBoy said:

I can't see state pension being means tested, it's a massive vote loser and will also encourage people to retire earlier, the opposite of what the govt want

I agree.  I note that state pension is taxable, so anyone with >50k/year from other sources pays 40% on their state pension anyway.

But there is huge inequality between young and old.  Young are typically paying an extra 9% 'graduate tax', whereas old don't pay NI on earnings.  Arguably merging NI and income tax would go some way to fixing this. 

Many "oldies" never had the opportunity to have to pay "graduate tax", it is not something you have to pay it is down to the path you choose.  I don't agree with merging NI and tax but NI should be paid on earned income irrespective of age and all benefits should be brought into the tax system, especially the gateway benefits.

Contrary to popular belief, not all of us oldies enjoyed 'free' university education.  That was limited to just the 12%(ish) of school leavers whose parents could afford for them to continue 'swanning around in school instead of getting a job and bringing much needed money into the house'.

The only one my class who went on to university was a GP's daughter.

I think that is a slightly missguided statement. I came from a very working class background, so much so when I was younger rather than having new shoes bought me I had the ends cut of the current shoes, we really didn't have any money. However that did not stop me from going to university, I paid for myself through A levels, having a full time job in the summer working 7 days a week and then having a number of jobs in the winter. 

Following my A levels I went to uni, the first person in my family, I got a full grant, my parents did not need to contribute. Without that full grant I doubt if I would ever have gone to uni, so I did enjoy a free university education.

Silvertabby

SouthCoastBoy said:

Silvertabby said:

molerat said:

marlot said:

SouthCoastBoy said:

I can't see state pension being means tested, it's a massive vote loser and will also encourage people to retire earlier, the opposite of what the govt want

I agree.  I note that state pension is taxable, so anyone with >50k/year from other sources pays 40% on their state pension anyway.

But there is huge inequality between young and old.  Young are typically paying an extra 9% 'graduate tax', whereas old don't pay NI on earnings.  Arguably merging NI and income tax would go some way to fixing this. 

Many "oldies" never had the opportunity to have to pay "graduate tax", it is not something you have to pay it is down to the path you choose.  I don't agree with merging NI and tax but NI should be paid on earned income irrespective of age and all benefits should be brought into the tax system, especially the gateway benefits.

Contrary to popular belief, not all of us oldies enjoyed 'free' university education.  That was limited to just the 12%(ish) of school leavers whose parents could afford for them to continue 'swanning around in school instead of getting a job and bringing much needed money into the house'.

The only one my class who went on to university was a GP's daughter.

I think that is a slightly missguided statement. I came from a very working class background, so much so when I was younger rather than having new shoes bought me I had the ends cut of the current shoes, we really didn't have any money. However that did not stop me from going to university, I paid for myself through A levels, having a full time job in the summer working 7 days a week and then having a number of jobs in the winter. 

Following my A levels I went to uni, the first person in my family, I got a full grant, my parents did not need to contribute. Without that full grant I doubt if I would ever have gone to uni, so I did enjoy a free university education.

I applaud you for that.  In my case, my year was the very last one which had the option of leaving at 15.  I really wanted to stay on, to do at least my O levels, but the choice wasn't mine to make.

My parents made it quite clear that I had to get a job to pay for my 'keep'.  Back then my mum worked for the Co-op, who would employ children of current employees on request......  There wasn't even an interview I could fail.  I left school on the Friday and started stacking shelves on the following Monday.  Later that night, my mum asked me if I had enjoyed myself, and I burst into tears and said that I wanted to do more than that.  My first day as a 'career girl' ended with a good hiding and being sent to bed without any tea for being 'an uppity little madam'.

To add insult to injury, I couldn't enrol at night school before the age of 16.  I signed up for the first of my O levels the following year, which my mum and dad said was a complete waste of time and money, even when I got As for both.

Then I joined the WRAF and the rest is history....