Budget to boost lifetime allowance for pension savings

Flugelhorn

Well we ain't going to do the evening shift after a whole day unless we get paid!

MK62

Flugelhorn said:

Ideally they need a simpler way to calculate the AA liability rather than just guessing and getting a nasty shock

In the NHS, an employee who exceeds the Annual Allowance in the NHS pension schemes can elect for "scheme pays", (either mandatory or voluntary).......so the shock shouldn't really be all that nasty......

Flugelhorn

MK62 said:

Flugelhorn said:

Ideally they need a simpler way to calculate the AA liability rather than just guessing and getting a nasty shock

In the NHS, an employee who exceeds the Annual Allowance in the NHS pension schemes can elect for "scheme pays", (either mandatory or voluntary).......so the shock shouldn't really be all that nasty......

they can but think there were some problems over missing deadlines etc (not sure - I have retired and it is no longer an issue) - much of the info is very out of date to calculate these things. When I retired they didn't finalise the amounts until 2 years after I took the pension (3 years after I left the scheme) 

drjohn67

Flugelhorn said:

lisyloo said:

I raised a smile when they said how poor (junior) doctors were and then how we needed to stop doctors retiring early because they were "too wealthy".
I realise there's an imbalance there across the profession but it did raise a wry smile.

yes there is a huge scale across the grades but then it gives you something to look forward to (!) and the pay matches the responsibility levels and experience   
When I started as Junior Doctor I worked bank holidays for 30% of the normal pay, cleaners were on time and a half so much better off - but hey things got better over time 

This is better Monty Python style
30%
You were lucky. We had 25%.
The shocking fact was it was 1in2, i.e. over 102hrs per week. 37hrs paid the same as the local factory production line workers and 65hrs paid a pittance despite being awake 24/7 and working Christmas, etc.
The government demanded an exemption from the human rights act to abuse the human rights of thousands of junior doctors in that way.

The starting pay for junior doctors today does not reflect the qualifications, atrocious intensity and risk, leaving uni with 80-100000 debt or the ongoing professional fees and expenses. (Can't catch a bus to commute to shifts overnight, weekends or Bank Holidays). 

DoublePolaroid

lisyloo said:

I raised a smile when they said how poor (junior) doctors were and then how we needed to stop doctors retiring early because they were "too wealthy".
I realise there's an imbalance there across the profession but it did raise a wry smile.

Without wishing to derail the thread, there is an important point here which both the media and the junior docs themselves appear to have failed to adequately communicate to the public.

Career progression for a large chunk of junior doctors is impossible because there are far more junior docs competing for most hospital specialty consultant posts than are actually available. So whilst in the past the quid pro quo could be said to go something along the lines of we'll pay you less than market rate and flog you as a junior, but when you become a consultant you'll make it back, that is simply not going to be the case for many of them now.

I think that they should be pushing this line of reasoning a little more in justifying their industrial action - because the fact that consultants are being paid £260/hr to fill in demonstrates they absolutely are paid below market rates by their monopoly employer - but what do I know?

Flugelhorn

DoublePolaroid said:

Career progression for a large chunk of junior doctors is impossible because there are far more junior docs competing for most hospital specialty consultant posts than are actually available. So whilst in the past the quid pro quo could be said to go something along the lines of we'll pay you less than market rate and flog you as a junior, but when you become a consultant you'll make it back, that is simply not going to be the case for many of them now.

Is that correct know ? Oh for goodness sake they went through years and years of senior registrar bottlenecks with people having qualified and worked in junior and middle grade, taken exams, got time expired and then there were simply no jobs to go to. Thought they sorted the numbers out for a while but sounds like the system has collapsed again

drjohn67

It is possibly not going to be an extra amount available for those who have already crystalised pension benefits. 
Hence, it may not encourage people to return.
Could also have the opposite effect if a significant proportion decides to retire/crystalise now because their benefits are suddenly improved, or to avoid the risk of it being reduced again in future. (Lifetime protection may not always be available).

Highly experienced senior doctors are a limited asset of value to society.
Not retaining juniors, emigration, or having a tranche bailing out and retiring now risks destabilising NHS services further (not just during industrial action). That would be hard to recover from. 

artyboy

westv said:

Why is there another budget thread when we already have one discussing the same?

One could equally ask why there are hundreds of almost identical 'state pension top up' threads. Or, a few months ago, dozens of 'DB pension transfer' threads.

Not that either of us are the forum police but whereas the other thread was started with the intent of covering broader budget speculation, this does look like one specific change that is being very clearly broadcasted ahead of Hunt's speech, and worthy of separate discussion.

And selfishly for me, it means the thorny decision over whether to fully crystallise at 57 (or not) should be a moot point.

JamTomorrow

It will also be interesting to see if there is any move to a flat rate of tax relief of say 30% but suspect this would be too difficult to administer and could bring more people into self-assessment.  If the AA is increased to £60k it's a little embarassing that this will then make it easier for people to avoid the 62% effective marginal rate between £100k and £125,270.

norsefox

JamTomorrow said:

It will also be interesting to see if there is any move to a flat rate of tax relief of say 30% but suspect this would be too difficult to administer and could bring more people into self-assessment.  If the AA is increased to £60k it's a little embarassing that this will then make it easier for people to avoid the 62% effective marginal rate between £100k and £125,270.

That's the problem with a tax system which has been deliberately created to be opaque.  The 60p rate was a workaround so that the government could claim not to have increased tax, whilst increasing the tax raised.  Similar to the fiscal drag everyone is now experiencing.  It's an absurdity, that should just be replaced with a flat 45p from £100k.

Where the breakeven point is, I don't know, but anyone wise enough is avoiding that taxation level using a variety of methods.  It's a huge disincentive. and creates wild behaviour to avoid tax - either through reduced hours, extra pension, electric vehicles, or unnecessary bike purchases.  How much tax is lost I don't know, but I imagine it's  not negligible.

It won't be - perhaps quietly lost when all of the various tax thresholds are adjusted at some point between now and 2026.  

Agreed on your point re a flat rate of tax.  That would need to be consulted upon for a prolonged period, and would have massive implications for pension providers, employers, and employees.  That's not going to happen three weeks ahead of a new financial year.