LTA with 25% tax free?

Albermarle

lisyloo said:

Albermarle said:

Silvertabby said:

jim8888 said:

NoMore said:

Yes I suspect that the current cap will be deflated in real terms by successive governments not choosing to increase it. Until it gets to a point where your average man in the street is suddenly aware that his whole pension is not 25% tax free.

That might be quite far away, given what I just clipped from The Telegraph!

"After a lifetime of saving, the average UK pension pot stands at £37,600 for those between 55 and retirement age.

This puts the average UK pension pot’s income at around £12,000 a year (including a full state pension), well below what is needed for a moderate income in retirement."

I don't think it's quite as bad as that.  This oft quoted 'average' £37,600 is per DC pot, and many people will have more than one or a combination of DCs/DBs.

If we were to be factored into these figures, then we would show as having zero pension pots between us.  Not one penny in any DC scheme.  But we do have over 80 years of public sector DB pensions.

I've long suspected that it's a ploy by pension companies to encourage people to save more.

 On the other side they do not seem take into account those with zero pension provision, which of course would bring the average down. So you can almost pick any figure you like.

yes, but I think we can say that the majority of ordinary people don't have to worry about 25% of £1.073 million at the moment.
Over may years/decades it would deflate, but having been planning around LTA for several years and it being gone in almost a heart beat (it wasn't on the radar for long as far as I'm aware), the real take away here for me is that all the rules we've been planning on for years and even decades can change very quickly. This is why some people bought property years ago (although much less attractive now).
So who knows??

I think though as a generalisation, that despite rule changes pensions continue to be a good way to save for retirement.